Official Answer Key & Detailed Solution
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Correct Answer: Option (D) — 1, 2 and 3
Concept & Option Breakdown
Standard Reference VerifiedThe Capital Budget comprises Capital Receipts and Capital Expenditures:
- Expenditure on acquiring physical assets (roads, buildings, machinery) creates assets for the nation and forms part of Capital Expenditure.
- Loans received from foreign governments and multilateral institutions create debt liabilities and are categorized as Capital Receipts.
- Loans and advances granted by the Centre to State Governments and Union Territories create financial assets (claims) and are part of Capital Expenditure. Thus, all three are part of the Capital Budget.
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