Budget 2025-26: Key Revenue Expenditure Component

The question asks to identify the largest component of Revenue Expenditure in India's Union Budget for 2025-26. Revenue expenditure refers to the government's spending on day-to-day operations and services that does not result in the creation of assets.

Identifying Major Revenue Expenditure

Understanding the structure of government budgets reveals typical patterns in expenditure. While specific percentages vary yearly, certain items consistently dominate revenue spending:

• Interest Payments: This represents the cost of servicing the government's borrowing. It is often the single largest item in revenue expenditure as governments finance deficits through debt.
• Salaries and Pensions: Expenditure on government employees' salaries, wages, and pensions forms a substantial part.
• Subsidies: Government support for various sectors (e.g., food, fertilizer, fuel) also constitutes significant revenue spending.
• Defence Services: While substantial, it's usually less than interest payments or salaries/pensions.
• Grants-in-Aid: Transfers to state governments and other bodies.

Conclusion on Major Portion

Based on typical budget allocations and fiscal realities, Interest Payments consistently comprise the major portion of the Union Government's Revenue Expenditure. This is due to the cumulative effect of past borrowings and ongoing fiscal management.