Civil Services Prep

Prelims 2016 · Economy · Question 37

Which of the following is/are included in the capital budget of the Government of India?<br/>1. Expenditure on acquisition of assets like roads, buildings, machinery, etc.<br/>2. Loans received from foreign governments<br/>3. Loans and advances granted to the States and Union Territories<br/><br/>Select the correct answer using the code given below.

  1. 1 only
  2. 2 and 3 only
  3. 1 and 3 only
  4. 1, 2 and 3

Answer

1, 2 and 3

1. Expenditure on acquisition of assets like roads, buildings, machinery, etc. Capital budget includes capital expenditure, i.e., spending that creates assets or reduces liabilities. Verdict: Correct.

2. Loans received from foreign governments Capital budget also includes capital receipts such as borrowings and loans raised by the Government. Verdict: Correct.

3. Loans and advances granted to the States and Union Territories These are part of capital expenditure because they lead to creation of financial assets for the Union Government. Verdict: Correct.

Hence, all three are included in the capital budget of the Government of India.

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