Budget FAQs: What is Capital Budget?

Budget FAQs: What is Capital Budget?

Capital budget primarily deals with capital receipts and capital payments

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Union Finance Minister, Nirmala Sitharaman has the big task of presenting the Union Budget 2020 on February 1. Every year, the Union Budget attracts a lot of attention as it affects the livelihood of people from all walks of life.

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However, understanding all the aspects of the budget at times gets difficult for commoners. Hence, "What is capital budget?" is highly searched on Google. Nonetheless, we are here to simplify the concept of "Capital Budget".

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Meaning of Capital Budget:

Capital budget primarily deals with capital receipts and capital payments. 

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Capital receipts include the money a government gets through treasury bills, market loans, loans received from a foreign government, disinvestment receipts or debt paid by Union Territories or state governments and other parties.

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On the other side, capital payments comprise of expenditures on acquisition of assets like land, buildings, machinery, equipment, as also investments in shares, etc., and loans and advances granted by the central government to state and Union Territories, government companies and corporations, among others.