Question
UPSC Prelims 2016 Question:
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:
Answer (Detailed Solution Below)
Detailed Solution
Explanation : Generally, the Government budget is divided into Revenue Budget and Capital Budget. Capital budgeting comprises two words — 'capital' and 'budget'. It implies setting targets for projects/schemes to ensure maximum profitability. The Capital Budget consists of capital receipts and capital expenditure. The details of the components of the Capital Budget are as follows:
| Capital Receipts | Capital Expenditure |
|
1) loans raised by Government from public, called market loans, borrowings by Government from Reserve Bank and other parties through sale of Treasury Bills, loans received from foreign Governments and bodies, 2) disinvestment receipts and 3) recoveries of loans from State and Union Territory Governments and other parties. So, point 2 is correct. |
1) expenditure for acquiring assets like land, buildings, machinery, equipment, investments in shares, etc. 2) loans and advances granted by the Central Government to State and Union Territory Governments, Government companies, Corporations and other parties. So, points 1 and point 3 are correct. |
Therefore, option (4) is the correct answer.
Subject: Economics | Public Finance
Last updated on January, 2026
