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Capital Budget

Q. Which of t...

Question

Q. Which of the following is a component of Capital Expenditure?

Which of the statements given above is/are correct?

A

1 and 2 only

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B

2 and 3 only

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C

3 only

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D

1, 2 and 3

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Solution

The correct option is A 1 and 2 only
Explanation:

Statement 1 is correct: Grant given to union territories help in the developmental projects and thus increases the assets of the government.

Statement 2 is correct: Repayment of loan taken from the World Bank reduces the liability of the government.

Statement 3 is incorrect: Interest paid on national debt is a revenue Receipt.It neither creates an asset nor reduces the liability of the government.

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Similar questions

Q. Identify the following as revenue expenditure and capital expenditure. Give reasons.
(i) Salary paid to Army officers.
(ii) Purchase of Metro coaches from Japan.
(iii) Repayment of Loan taken from World Bank.
(iv) Grants given by central government to state Government.
(v) Loan given to Union Territories.
(vi) Interest paid on National Debt
(vii) Expenditure on construction of Metro. (viii) Pension paid to retired Government employees.
(ix) 10% shares purchased by the Government in a private company.

Q. Short answer type questions:
Giving reasons, categorise the following into revenue expenditure and capital expenditure: (i) Subsidies; (ii) Grants given to State Governments; (iii) Repayment of loans; (iv) Construction of school buildings.

Q. 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.

Q. Which of the following are the components of foreign capital?

1

. Grants and loans.

2

. External commercial borrowings.

3

. Foreign direct investment.

4

. Deposits from non-residents.
Select the correct answer using the code given.

Why is repayment of debt capital expenditure?

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