Which of the following is a typical example of Revenue Expenditure?
Interest paid on a government loan
Revenue expenditure is government spending that neither creates assets nor reduces liabilities, such as salaries, pensions, subsidies, grants and interest payments. Interest paid on a government loan is a recurring cost of servicing debt and creates no asset, so it is revenue expenditure (it is the largest single item of the Centre's revenue expenditure).
Construction of a railway terminal, purchase of land for a PSU facility and funding a national highway project all create physical assets, so they are capital expenditure.
Hence, the example of revenue expenditure is interest paid on a government loan.
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