State with reasons whether you agree or disagree : Public expenditure includes only revenue expenditure.

Answer: Disagree.

Public expenditure is the expenditure incurred by public authorities (central, state and local governments) for the welfare of society. It includes both:

• Revenue expenditure: recurring expenditure for running the government that does not create assets, e.g. salaries, pensions, interest payments, subsidies, administration.
• Capital expenditure: non-recurring expenditure that creates assets or reduces liabilities, e.g. construction of roads, dams, bridges, hospitals, purchase of machinery, repayment of loans.

Public expenditure can also be classified as development and non-development expenditure, plan and non-plan expenditure. So it does not include only revenue expenditure.