In public finance, money spent by the government on its programmes and activities is referred to as what?

Introduction / Context:
This question is about basic terms used in government budgeting and public finance. Governments collect money from various sources and then spend it on different programmes, schemes, and administrative functions. Understanding the difference between revenue and expenditure is essential for reading budget documents and answering economy related questions in competitive exams.

Given Data / Assumptions:

• The context is government budgeting.
• The focus is money spent on government programmes.
• Options include revenue, obligation, expenditure, bonding, and surplus.

Concept / Approach:
In a government budget, revenue refers to receipts, that is, money coming in from taxes, fees, and other sources. Expenditure refers to payments made by the government to fund schemes, salaries, interest, subsidies, and capital projects. Obligations are commitments to pay, but not the actual payments themselves. Bonding refers to issuing bonds to borrow money. Surplus refers to the situation where revenue exceeds expenditure. The correct term for the act of spending money on programmes is expenditure.

Step-by-Step Solution:
Step 1: Recall that a standard budget is divided into two main sides, receipts and expenditure.Step 2: Money spent on health, education, defence, infrastructure, and welfare schemes appears on the expenditure side.Step 3: Revenue is the term used for money received, not money spent.Step 4: Therefore, the technical term for money spent is government expenditure.Step 5: Select expenditure as the correct answer.

Verification / Alternative check:
Looking at any budget speech or budget summary, you will see headings such as revenue expenditure, capital expenditure, and total expenditure. These sections list the amounts allocated to different ministries and schemes. On the other side, you see revenue receipts, capital receipts, and so on. This layout confirms that the standard term for spending is expenditure.

Why Other Options Are Wrong:
Revenue is the opposite side of the budget and refers to inflows, especially tax and non tax receipts. Obligation can mean a promise or legal duty to pay but is not the usual label for actual spending in budget tables. Bonding refers to raising funds by selling government bonds to investors. Surplus is the excess of revenue over expenditure and is a result, not the act of spending itself.

Common Pitfalls:
Some learners casually use revenue to mean any government money, including outflows, which leads to confusion. Others confuse deficit and expenditure, thinking that high spending automatically means a deficit, which is only true if spending is greater than revenue. Keeping the basic budget identity clear, where revenue is incoming funds and expenditure is outgoing funds, will help avoid these mistakes in exam questions.

Final Answer:
Money spent on government programmes and activities is referred to as expenditure in public finance.