Which of the following is/are included in the capital budget of the Government of India?
- Expenditure on acquisition of assets like roads, buildings, machinery, etc.
- Loans received from foreign governments.
- Loans and advances granted to the States and Union Territories.
Select the correct answer using the code given below.
Detailed Explanation:
Answer: Option 4 — 1, 2 and 3
The Capital Budget of the Government of India includes all transactions that either create assets or liabilities. It comprises both Capital Receipts (loans received, recovery of loans, etc.) and Capital Expenditure (acquisition of assets, loans granted, etc.).
✅ Statement 1 – Correct: Expenditure on acquisition of assets like roads, buildings, and machinery is Capital Expenditure as it creates physical assets for the country and is long-term in nature, hence included in the capital budget.
✅ Statement 2 – Correct: Loans received from foreign governments constitute Capital Receipts as they create a liability (repayment obligation) for the government, forming part of the capital budget.
✅ Statement 3 – Correct: Loans and advances granted to States and Union Territories are Capital Expenditure since they create financial assets for the central government (recoverable with interest), thus included in the capital budget.
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