This expenditure relates to normal functioning of the government departments and provision of various government services. The main examples of such expenditures are salaries, pensions, interest, subsidies, grants to the state governments, etc.

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Revenue expenditure Explanation: 1. Revenue expenditure is expenditure incurred for purposes other than the creation of physical and financial assets of the central government. 2. It relates to those expenses incurred for the normal functioning of the government departments and various services.

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