The two main components of the Karnataka state budget:

The correct answer is: A) Capital Expenditure and Revenue Expenditure

Capital expenditure is the expenditure incurred on the acquisition of fixed assets, such as land, buildings, plant and machinery. Revenue expenditure is the expenditure incurred on the day-to-day running of the government, such as salaries, pensions, and interest payments.

Plan expenditure is the expenditure incurred on the implementation of the Five Year Plans. Non-Plan expenditure is the expenditure incurred on all other activities of the government.

Fiscal deficit is the excess of government expenditure over its revenue receipts. Revenue deficit is the excess of government revenue expenditure over its non-tax revenue.

Here is a brief explanation of each option:

• Capital Expenditure: Capital expenditure is the expenditure incurred on the acquisition of fixed assets, such as land, buildings, plant and machinery. It is also known as developmental expenditure. Capital expenditure is incurred with the objective of increasing the productive capacity of the economy.
• Revenue Expenditure: Revenue expenditure is the expenditure incurred on the day-to-day running of the government, such as salaries, pensions, and interest payments. It is also known as non-developmental expenditure. Revenue expenditure is incurred for the purpose of maintaining the existing level of economic activity.
• Plan Expenditure: Plan expenditure is the expenditure incurred on the implementation of the Five Year Plans. It is also known as developmental expenditure. Plan expenditure is incurred with the objective of increasing the productive capacity of the economy.
• Non-Plan Expenditure: Non-Plan expenditure is the expenditure incurred on all other activities of the government. It is also known as non-developmental expenditure. Non-Plan expenditure is incurred for the purpose of maintaining the existing level of economic activity.
• Fiscal Deficit: Fiscal deficit is the excess of government expenditure over its revenue receipts. It is calculated as the difference between total expenditure and total revenue. Fiscal deficit is a measure of the government’s borrowing requirement.
• Revenue Deficit: Revenue deficit is the excess of government revenue expenditure over its non-tax revenue. It is calculated as the difference between revenue expenditure and non-tax revenue. Revenue deficit is a measure of the government’s dependence on tax revenue.