Which of the following is/are included in the capital budget of the Government of India?

1. Expenditure on acquisitions 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.

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

Explanation

All are correct

• The Capital Budget of the Government of India includes capital receipts and capital expenditure, which either create assets or reduce liabilities. Expenditure on the acquisition of assets such as roads, buildings, and machinery is treated as capital expenditure because it leads to the creation of assets. Loans received from foreign governments are included as capital receipts since they create liabilities for the government. Similarly, loans and advances granted to States and Union Territories are treated as capital expenditure because they create financial assets for the government. Therefore, all the given statements are correct.

Answer: (d) 1, 2 and 3; Difficulty Level: Easy