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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YESPYQ · Accepted Answer

Correct answer: 1, 2 and 3. Capital Budget consists of capital receipts (like disin- vestment, borrowing, loans from public or foreign governments, Reserve Bank of India, etc) and capital expenditure (like ex- penditure on development of machinery, health facilities, etc). Capital budgeting implies setting targets for projects/schemes to ensure maximum profitability. Statement 1 is correct : Capital Expenditure includes the expen- diture on the acquisition of land, building, machinery, equipment, creating assets such as roads and hospitals, repayment of govern- ment borrowings. Statement 2 is correct : Capital receipts components are Loan borrowings, disinvestments, funds received from the issue of shares or debentures, etc. Statement 3 is correct : Loans, and advances by the central gov- ernment to state and union territory governments, etc. are also included in the capital budget of the Government of India. UPSC GS Paper-I PYQs 302 The capital budget is divided into two parts i.e. capital re- ceipts and capital expenditure.  Capital Receipts : Capital receipts refer to incoming ca

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