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.

QUESTION

Medium

Economy

Prelims 2016

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.

Select an option to attempt

Explanation

Under Article 112 of the Constitution of India, the Annual Financial Statement has to distinguish expenditure of the Government on revenue account from other expenditures.

Government Budget, therefore, comprises Revenue Budget and Capital Budget.

Capital Budget consists of capital receipts and capital payments.

The capital receipts are loans raised by the Government from the public, called market loans, borrowings by the Government from the Reserve Bank and other parties through the sale of Treasury Bills loans received from foreign Governments and bodies, disinvestment receipts and recoveries of loans from State and Union Territory Governments and other parties.

Capital payments consist of capital expenditure on the acquisition of assets like land, buildings, machinery, and equipment, as also investments in shares, etc., and loans and advances granted by the Central Government to State and Union Territory Governments, Government companies, Corporations and other parties.

Therefore, all the statements are correct.

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