UPSC Prelims 2016 – Question 12

Q: 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

The correct answer is 1, 2, and 3. 

The capital budgets  

• It refers to an account of assets and liabilities of the government that includes capital receipts and capital expenditures. 
• Capital expenditure components examples are, 
  • Examples include spending on the acquisition of land, buildings, machinery, and equipment, the construction of assets like as highways and hospitals, the repayment of central government borrowings, loans, and advances to state and union territory administrations, and so on. Hence statement 1 and 3 is correct. 
• Capital receipts components Examples are, 
  • Examples include loan borrowings, disinvestments, monies acquired via the issuance of shares or debentures, and so forth. Hence statement 2 is correct. 

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