The figure shows the components of the government budget. Some boxes are labelled P, Q, R and S.
Identify P, Q, R and S.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → P – Revenue Budget, Q – Capital Budget, R – Capital Receipts, S – Tax Revenue
The budget has two accounts: the revenue budget and the capital budget. Each has receipts and expenditure. Revenue receipts split into tax and non-tax revenue; capital receipts sit in the capital budget.
Borrowings and direct taxes are only parts of capital receipts and tax revenue, so they are not the names of the boxes.
Note: Chart 1 puts a whole section of the chapter into one small picture. Learn the chart box by box, as a question can test it without a word of the text.
NCERT (2026-27): “5.1 Government Budget — Meaning and its Components … Although the budget document relates to the receipts and expenditure of the government for a particular financial year, the impact of it will be there in subsequent years. There is a need therefore to have two accountsthose that relate to the current financial year only are included in the revenue account (also called revenue budget) and those that concern the assets and liabilities of the government into the capital account (also called capital budget). …” “5.1.2 Classification of Receipts Revenue Receipts: Revenue receipts are those receipts that do not lead to a claim on the government. They are therefore termed non-redeemable. They are divided into tax and non-tax revenues. …” |