Chapter 14 - Public Economics Match the following

Chapter 14 - Public Economics
Match the following


Group A 

Group B
1.
Deficit budget 
a.
Tax revenue
2.
Government budget
b.
Capital receipts
3.
Fees, license fee  
c.
Irrigation
4.
Borrowings
d.
Non-tax revenue
5.
Plan expenditure
e.
One year


f.
Government expenditure > Government revenue


g.
Two years.

Answer: 


Group A

Group B
1.
Deficit budget 
f.
Government expenditure > Government revenue
2.
Government budget
e.
One year
3.
Fees, license fee  
d.
Non-tax revenue
4.
Borrowings
b.
Capital receipts
5.
Plan expenditure
c.
Irrigation


Explanations:
                                                            
1. Deficit budget refers to the excess of the total budgeted expenditure over the total budgeted receipts. In other words, budget deficit implies a situation where the total budget receipts of the government fall short of the total budget expenditure of the government. That is,
Deficit budget = Government expenditure > Government revenue

2. A government budget is a financial statement showing item-wise expected government receipts and government payments during a financial year. A financial year is typically for one year.  Hence, it can be concluded that the government budget is for one year.

3. Non-tax revenue refers to the revenue received by the government from sources other than the taxes. Fees and license fee are imposed by the government for providing various services to people. Since they are not a part of taxes, the revenue generated from them is classified as non-tax revenue.

4. Capital receipts are those receipts of the government which either create a liability or cause a reduction in the assets of the government. Since the borrowing of funds by the government creates a liability on it, receipts from the borrowing activities are treated as capital receipts.

5. Plan expenditure refers to that budget expenditure which is incurred by the government on the planned programmes as per five year plan. As the expenditure of the government on irrigation is a planned one, it is plan expenditure.

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