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.
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Answer: D. The capital budget has capital receipts and capital expenditure. Item 1 is capital expenditure (creating assets). Item 2, loans from foreign governments, is a capital receipt. Item 3, loans to States and UTs, is capital expenditure. So 1, 2 and 3.
Watch for: Students forget that borrowings received are capital receipts, not only spending on assets.
Why the other options are wrong
- A. Wrong because foreign loans and loans to States are also in the capital budget.
- B. Wrong because spending on assets is also capital expenditure.
- C. Wrong because loans received from foreign governments are capital receipts.
Source to check: NCERT Class 12 Introductory Macroeconomics, Chapter 5 'Government Budget and the Economy'
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.