Capital Expenditure : The money spent by the government on agriculture, industry, transport, electricity, irrigation projects and other developmental activities along with creation of new assets is called Capital Expenditure. The government spends this amount from the income generated by the capital receipts. In Capital Expenditure also, there are two types. They are:
1. Planned Expenditure and
The expenditure incurred on long-term developmental projects in agriculture, industry, transport, irrigation etc. is called Planned Capital Expenditure. The expenditure incurred by the government on paying compensation to people affected by the developmental activities is called Non-planned Expenditure. In this manner, the government spends money on administration, national economic development and citizens’ welfare. To meet this expenditure, the government tries to generate Income.