1. why is repayment of loan a capital expenditure?

2.why is payment of interest a revenue expenditure?

3.why subsidies are treated as revenue expenditure?

4.why are borrowings treated as capital reciepts?

5.in a govt budget , revenue deficit is rs 50000 crore and borrowings are 75000 crore . in this how much is the fiscal deficit if the revenue deficit of previous year is 50000 crore and interst of previous year 8000 crore ... calculate..

4. Borrowings is treated as Capital Receipts because they create Liabilities or reduces assets. The governmentis under obligation to retuen the amount along with Interest.

2. Payment of Interest is treated as a Revenue expenditure because it does not lead to any creation of assets or reduces the  Liabilities of the Government.

3. Subsidies are treated as a Revenue expenditure because it does not lead to any creation of assets or reduces the Liabilities of the Government.

1. Repayment of Loan is treated as a capital Expenditure because it reduces the Liabilities of the Government.

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