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 ✓ UPSC's answer
Why the answer is (d)
• The capital budget covers capital receipts and capital expenditure — transactions that create or reduce assets and liabilities.
• Capital expenditure includes acquisition of assets such as roads, buildings and machinery (1) and loans and advances given to States and UTs (3).
• Capital receipts include loans from foreign governments and multilateral bodies (2), market borrowings and disinvestment proceeds.
• Hence 1, 2 and 3, option (d).
Why the other options are wrong
- (a) 1 only
- Foreign loans and loans to States are also in the capital budget.
- (b) 2 and 3 only
- Asset acquisition is capital expenditure.
- (c) 1 and 3 only
- Loans received from foreign governments are capital receipts.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2016, held on 7 August 2016. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.