What is Capital Budget

Capital Budget consists of capital receipts (like disinvestment, borrowing, loans from public or foreign governments, Reserve Bank of India, etc) and capital expenditure (like expenditure on development of machinery, health facilities, etc).

 

Capital budgeting comprises two words — 'capital' and 'budget'. It implies setting targets for projects/schemes to ensure maximum profitability.

 

Parts of Capital Budget: Capital budget is divided into two parts — capital receipts and capital expenditure.

 

Capital receipts in Union Budget

 

Capital receipts refer to incoming cash flows. They can be both non-debt and debt receipts. Loan from the general public, foreign governments and RBI form a major part of capital receipts.

 

Example