Revenue expenditure is a reserve of money used by an establishment to acquire or upgrade physical assets. Revenue expenditure is beneficial for the current business year.
Comparison: Revenue expenditure and capital expenditure
Capital expenditure results the increase or acquirement of an asset, whereas revenue expenditure is necessary for the sustenance of earning capacity.
Revenue expenditure: Purposes
Revenue expenditure is the reserve of money used by an establishment to develop or raise physical assets like equipments, industrial buildings or properties. The operations of an establishment include everything from constructing structures to repairing parts of the building.
Revenue Expenditure
| Items
| Budget Estimates(In crore of Rupees)
|
| 1999-2000
| 2000-2001 |
| Interest Payments
| 88000
| 101266
|
| Subsidies
| 23798
| 22800
|
| Grants to State and U.T. Governments
| 8198
| 17676
|
| Pensions
| 10131
| 15843
|
| Defence Revenue Expenditure
| 33464
| 40661
|
| Social Services
| 5403
| 6187
|
| Postal Deficit
| 871
| 1961
|
| Expenditure of Union Territories without Legislature
| 1022
| 1185
|
| Grants to Foreign Governments
| 429
| 421
|
| Police
| 5899
| 6735
|
| Economic Services
| 6176
| 7183
|
| Other General Services
| 5947
| 6525
|
| Other Expenditure
| 993
| 325
|
| Total Revenue Expenditure
| 190331
| 228768
|
Factors: Revenue Expenditure
Any business establishment incurs an appreciable number of expenses to steadily maintain it's business operations. There are two broad categories of business expenditure a company can incur. The first category of business expenditure comprises items incurred for running everyday operations of the establishment. Examples of day to day operations include expenditure on rent incurred, factory expenses, salary payment to employees, administrative expenses and sales commissions.
The second category of expenditure comprise assets bought by the company. This results in increased productivity and enhanced efficiency of the establishment. Some of the important examples of this kind of expenditure include purchase of office automation equipments, purchase of office vehicles, purchase of furniture and computer equipments.