A lot has been written about the Budget and how it affects this or that industry or business, or how it will increase or decrease growth.Undoubtedly, all these factors are important, but there has been little that explains to the layman the key numbers.
The budget has two components: recurrent expenditure and development expenditure.
Recurrent expenditure is the money set aside for wages, salaries, and emoluments and for the running and maintenance of already existing government institutions.
On the other hand, development expenditure outlines expenditure on new capital and social infrastructure such as construction of new roads, schools, hospitals and public utilities.
Development expenditure
In the current Budget, Finance minister Uhuru Kenyatta is proposing to spend Sh1,155 billion on both recurrent and development expenditure during the fiscal year 2011/12.
Of the total budgeted expenditure, Sh754.4 billion will go towards recurrent expenditure. The remaining Sh398.6 billion will be for development expenditure.
This expenditure has to be funded or sourced from somewhere.
The government has many sources of revenue which mainly consist of direct taxes on individual and corporate incomes, taxes on goods and services, capital gains tax, inheritance tax, among others.
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