gs1medium
Which of the following is/are included in the capital budget of the Government of India?
- 1.Expenditure on acquisition of assets like roads, buildings, machinery, etc.
- 2.Loans received from foreign governments.
- 3.Loans and advances granted to the States and Union Territories.
Select the correct answer using the code given below.
- A.1 only
- B.2 and 3 only
- C.1 and 3 only
- D.1, 2 and 3
▶ Answer & Explanation
Correct answer: D. 1, 2 and 3
The capital budget of the government accounts for capital receipts and capital expenditure, which affect its assets and liabilities. Expenditure on acquiring productive assets like roads and buildings is capital expenditure. Loans received from foreign governments or institutions are capital receipts as they increase government liabilities. Similarly, loans and advances given to states and union territories are also considered capital expenditure because they create financial assets for the government.
Source: UPSC gs1 2016