Budget 2021 | What is Capital Budget?

Union Finance Minister Nirmala Sitharaman is set to table the Union Budget on February 1 as India looks to recover from the economic catastrophe caused by the Covid-19 pandemic.

In 2019, India overtook the UK to become the fifth-largest economy in the world. The economic slowdown in the country, however, hit way ahead of the disruption caused by the pandemic.

With the Covid-19 vaccination drive underway, hopes of a faster economic recovery are alive.

Here are some of the terms to understand the Budget better:

Also read: Budget 2021 | What comprises Economic Survey?

What is Capital Budget?

The capital budget primarily deals with capital receipts and capital payments.

Capital receipts include money a government gets through treasury bills, market loans, loans received from a foreign government, disinvestment receipts, or debt paid by Union Territories or state governments and other parties.

Also read: Budget 2021 | What is Demand for Grants?

On the other side, capital payments comprise expenditures on the acquisition of assets like land, buildings, machinery, equipment, as also investments in shares, etc., and loans and advances granted by the central government to state and Union Territories, government companies and corporations, among others.