Prelims 2016 · Economy · Question 37
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.
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.