DMPQ- Write a short essay on followings: (A) Revenue Expenditure (B) Rolling plan (C) Round Tripping

Revenue Expenditure

Broadly the expenditure which does not result in creation of assets for Government of India is treated as revenue expenditure. An expenditure that neither creates assets nor  reduces a liability is categorized as revenue expenditure. Revenue expenditure is for the normal running of Government departments and various services, interest payments on debt, subsidies, etc. All grants given to State Governments/Union Territories and other parties are also treated as revenue expenditure  even though some of the grants may be used for creation of assets. It is recurring in nature and incurred  regularly.

Rolling plan

 Fifth FYP was launched and planned for period 1974-79 but Janata Government came  in power in 1978 and ended the plan prematurely in 1978. The Janta government launched sixth FYP for period 1978-1983. Congress government when came in power in 1980 abandoned the sixth FYP and launched a new sixth FYP for period 1980-1985. The plan for period, 1978-80, is called the rolling plan.

Round Tripping

Round tripping involves getting the money out of one country, say India, sending it  to a place like Mauritius and then, dressed up to look like foreign capital, sending it back home to earn  tax-favored profits. The problem for the home country is that native profits escape taxation this way.  And instead of foreign capital flowing into the country, local capital just gets a free ride.


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