Public expenditure can be classified into two headings namely, Recurrent expenditure and Capital expenditure.
Recurrent Expenditure: These are the expenses on running costs which are repeated every year. Expenses on payment of wages and salaries, maintenance of infrastructure, payments of rents and interest are examples of recurrent expenditure.
Capital Expenditure: are expenses on projects of permanent nature. These expenses do not recur every year. Examples of capital expenditure include building of schools, hospitals, roads, dams, electrification projects, procuring new machinery, aircraft and construction of airports.
