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Q99 (IAS/2022) Economy › Basic Concepts & National Income › Capital vs revenue expenditure Official Key

With reference to the expenditure made by an organisation or a company, which of the following statements is/are correct? 1. Acquiring new technology is capital expenditure. 2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. Select the correct answer using the code given below:

Result
Your answer: —  ·  Correct: A
Explanation

The correct answer is Option 1. Statement 1 is correct because capital expenditure (CapEx) refers to funds used by a company to acquire, upgrade, and maintain physical assets or intangible assets like technology. Since acquiring new technology provides long-term benefits beyond one financial year and enhances the productive capacity of the organization, it is classified as capital expenditure.

Statement 2 is incorrect because both debt and equity financing are methods of raising capital and pertain to the liability or equity side of the balance sheet, rather than the expenditure side. While the repayment of a loan principal is a capital outflow, the act of financing itself is not "expenditure" in the accounting sense.

  • Capital Expenditure: Creates assets or reduces liabilities (e.g., buying machinery).
  • Revenue Expenditure: Incurred for day-to-day operations (e.g., salaries, rent), providing no long-term asset creation.
How others answered
Each bar shows the % of students who chose that option. Green bar = correct answer, blue outline = your choice.
Community Performance
Out of everyone who attempted this question.
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got it right
PROVENANCE & STUDY PATTERN
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Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
Q. With reference to the expenditure made by an organisation or a company, which of the following statements is/are correct? 1. Acquiring n…
At a glance
Origin: Books + Current Affairs Fairness: Low / Borderline fairness Books / CA: 3.3/10 · 6.7/10

This question tests the fundamental accounting definition of 'Capital' vs 'Revenue'. Statement 1 is textbook static found in NCERT. Statement 2 is a logic trap: 'Financing' is a source (Receipt), not an Expenditure. If you know the Balance Sheet equation (Sources vs Applications), this is a sitter.

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
In corporate accounting, is acquiring new technology (e.g., purchasing software, hardware, or technology systems) classified as capital expenditure or revenue expenditure?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > 2. Capital Expenditure > p. 108
Presence: 5/5
“Capital expenditure results in the acquisition of a tangible or intangible asset or payment of liabilities. Thus, it impacts the asset-liability status of the Government. Capital expenditures are focussed on GDP growth and thereby incurred on building durable assets like highways, multipurpose dams, irrigation projects, buying machinery and equipment. They are non-recurring type of expenditures also in the form of capital investments.”
Why this source?
  • Explicitly defines capital expenditure as resulting in acquisition of a tangible or intangible asset.
  • Links capital expenditure to changes in asset-liability status, which fits purchasing software/hardware.
  • Gives examples (machinery, equipment) that map to technology hardware and analogous treatment for intangibles.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.4 Budget Classification > p. 152
Presence: 4/5
“It also includes small savings schemes (Post office savings accounts, National Savings Certificates etc.), Provident Funds and net receipts obtained from the sale of shares in PSUs (disinvestment). Capital Expenditure: Those expenses of the government which either creates assets (physical or financial) or reduces liabilities are called capital expenditures. Capital expenditures include acquisition of land, building, machinery, equipment, purchase of shares by the government and loans and advances by the central government to state and union territory governments, PSUs and other parties.”
Why this source?
  • States capital expenditure creates physical or financial assets.
  • Specifically lists acquisition of machinery and equipment as capital spending, analogous to technology purchases.
Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > CHAPTER SUMMARY > p. 125
Presence: 4/5
“Revenue Expenditure - regular expenses - expenditures incurred on civil administration, defence forces, public health and education, maintenance of Government machinery, etc. does not impact the asset-liability status - high-revenue expenditure indicates poverty and backwardness of the economy. • Capital Expenditure: one-time expenses, acquisition of a tangible or intangible asset, or payment of liabilities - impacts asset-liability status - improves the productive capacity of the economy - high capital expenditure indicates lack of private investment in the economy”
Why this source?
  • Describes capital expenditure as one-time expense for acquisition of tangible or intangible assets.
  • Notes capital expenditure improves productive capacity, consistent with investing in technology systems.
Statement 2
In corporate accounting, is debt financing (raising funds by borrowing) classified as capital expenditure or revenue expenditure?
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 5/5
"Debt financing for capital expenditure Debt financing involves borrowing funds from external sources, such as banks, financial institutions, or bond investors. The borrowed funds are repaid over time, usually with interest."
Why this source?
  • The passage explicitly treats borrowing as a financing method for capital expenditure: 'Debt financing for capital expenditure'.
  • It describes debt financing as borrowing funds to fund capital projects, indicating borrowing is a funding mechanism used to pay for CapEx rather than an expense category itself.
Web source
Presence: 4/5
"Capital expenditure is recorded as an asset on the balance sheet and is typically depreciated over its useful life, while operational expenditure is recorded as an expense on the income statement for the period it is incurred."
Why this source?
  • This passage defines capital expenditure and explains its accounting treatment (recorded as an asset and depreciated), clarifying what CapEx is that debt might finance.
  • By contrasting CapEx with operational (revenue) expenditure, it supports the distinction between types of expenditures that borrowing can be used to fund.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > Government Budgeting > p. 189
Strength: 4/5
“Acquiring new technology is capital expenditure.• 2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. Select the correct answer using the code given below: • (a) 1 only• (b) 2 only• (c) Both 1 and 2• (d) Neither 1 nor 2• 18. With reference to the Indian economy, consider the following statements: [2022] • 1. A share of the household financial savings goes towards government borrowings.• 2. Dated securities issued at market-related rates in auctions form a large component of internal debt: Which of the above statements is/are correct? • (a) 1 only• (b) 2 only• (c) Both 1 and 2• (d) Neither 1 nor 2”
Why relevant

Gives a direct-sounding classification rule claiming 'Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure' (presented in a question item).

How to extend

A student could treat this as an asserted convention and compare it with corporate accounting definitions (debt = long-term liability used for assets) to test applicability in corporate accounts.

Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Capital Expenditure > p. 70
Strength: 5/5
“There are expenditures of the government which result in creation of physical or financial assets or reduction in financial liabilities. This includes expenditure on the acquisition of land, building, machinery, equipment, investment in shares, and loans and advances by the central government to state and union territory governments, PSUs and other parties. Capital expenditure is also categorised as plan and non-plan in the budget documents. Plan capital expenditure, like its revenue counterpart, relates to central plan and central assistance for state and union territory plans. Non-plan capital expenditure covers various general, social and economic services provided by the government. The budget is not merely a statement of receipts and expenditures.”
Why relevant

Defines capital expenditure as expenditure that results in creation of physical or financial assets or reduction in financial liabilities.

How to extend

A student could ask whether proceeds of borrowings that create assets (e.g., buy machinery) make the borrowing effectively financing capital expenditure in corporate books.

Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Revenue Expenditure > p. 69
Strength: 5/5
“Revenue Expenditure is expenditure incurred for purposes other than the creation of physical or financial assets of the central government. It relates to those expenses incurred for the normal functioning of the government departments and various services, interest payments on debt incurred by the government, and grants given to state governments and other parties (even though some of the grants may be meant for creation of assets). 69 and the Economy Government Budget Budget documents classify total expenditure into plan and non-plan expenditure3 . This is shown in item 6 on Table 5.1 within revenue expenditure, a distinction is made between plan and non-plan.”
Why relevant

Defines revenue expenditure as expenses that do not create assets and includes interest payments on debt as part of revenue expenditure.

How to extend

A student could distinguish between (a) interest on debt (treated as revenue expense) and (b) the use of borrowed funds to buy assets (treated as capital expenditure) when judging the classification.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > Is it a Necessary Evil? > p. 114
Strength: 4/5
“The answer to this question depends on the composition of fiscal deficit in terms of revenue expenditure and capital expenditure. \Rightarrow If the deficit financing is undertaken to finance lower revenue expenditure and higher capital expenditure, it is good for the economy. It is because the borrowings in this case are routed to create capital assets in the economy, which may lead to increased production and higher GDP. On the other hand, if the majority of deficit financing is spent to meet revenue expenditure, it could be worst for a developing economy like India. It is because only routine expenses are tackled through this huge liability in terms of borrowings and not in the creation of capital assets, which may increase productive capacity of our economy.”
Why relevant

Explains that borrowings (deficit financing) routed to create capital assets are beneficial, whereas borrowings used for revenue expenditure cover routine expenses—implying different economic roles for borrowed funds.

How to extend

A student could extend this by mapping 'borrowings used for asset creation' to capital expenditure treatment in corporate accounting, and 'borrowings used for routine expenses' to revenue treatment.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > Effective revenue deficit' and 'effective capital expenditure' > p. 154
Strength: 4/5
“excludes such grants that are used for creation of assets and 'effective capital expenditure' which adds such grants. • Effective Revenue Deficit = Revenue Deficit Grants given to states for creation of capital assets• Effective Capital Expenditure = Capital Expenditure + Grants given to states for creation of capital assets. Deficit financing is the budgetary situation where government expenditure is higher than its revenue. It is a practice adopted for financing the excess expenditure with outside resources by either printing of additional currency or through borrowing.”
Why relevant

States deficit financing (borrowing) is used to finance excess expenditure and distinguishes capital expenditure additions (grants creating assets) from revenue grants that don't create assets.

How to extend

A student could use this pattern to infer that the classification depends on the purpose of the funds (asset-creating vs routine), then check corporate accounting rules for matching treatment.

Statement 3
In corporate accounting, is equity financing (raising funds by issuing shares) classified as capital expenditure or revenue expenditure?
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 5/5
"### Equity financing for capital expenditure Equity financing involves raising funds by issuing shares or ownership stakes in the company."
Why this source?
  • The passage explicitly labels a section 'Equity financing for capital expenditure', linking equity financing to CapEx.
  • It defines equity financing as raising funds by issuing shares, showing equity is presented as a way to fund capital expenditure projects.
Web source
Presence: 4/5
"Money spent to acquire or improve long-term assets (property, plants, equipment)"
Why this source?
  • Defines what capital expenditure (CapEx) is — money spent to acquire or improve long-term assets.
  • Provides the context that CapEx is distinct from revenue (operational) expenditure, supporting the interpretation that equity financing is discussed as a funding source for CapEx rather than as an OpEx item.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.4 Budget Classification > p. 152
Strength: 5/5
“It also includes small savings schemes (Post office savings accounts, National Savings Certificates etc.), Provident Funds and net receipts obtained from the sale of shares in PSUs (disinvestment). Capital Expenditure: Those expenses of the government which either creates assets (physical or financial) or reduces liabilities are called capital expenditures. Capital expenditures include acquisition of land, building, machinery, equipment, purchase of shares by the government and loans and advances by the central government to state and union territory governments, PSUs and other parties.”
Why relevant

Gives a general rule that capital expenditure includes creation of physical or financial assets and explicitly lists 'investment in shares' as a capital expenditure for the government.

How to extend

A student could extend this rule to corporate accounts by asking whether issuing or holding shares creates a financial asset/liability and thus would be treated as capital in accounting.

Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Capital Expenditure > p. 70
Strength: 4/5
“There are expenditures of the government which result in creation of physical or financial assets or reduction in financial liabilities. This includes expenditure on the acquisition of land, building, machinery, equipment, investment in shares, and loans and advances by the central government to state and union territory governments, PSUs and other parties. Capital expenditure is also categorised as plan and non-plan in the budget documents. Plan capital expenditure, like its revenue counterpart, relates to central plan and central assistance for state and union territory plans. Non-plan capital expenditure covers various general, social and economic services provided by the government. The budget is not merely a statement of receipts and expenditures.”
Why relevant

States capital expenditure results in creation of physical or financial assets and includes 'investment in shares' among examples.

How to extend

Use the example of 'investment in shares' to probe whether raising equity (issuing shares) parallels government investment in shares or instead affects ownership/equity structure in corporate accounting.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > CHAPTER SUMMARY > p. 125
Strength: 5/5
“Revenue Expenditure - regular expenses - expenditures incurred on civil administration, defence forces, public health and education, maintenance of Government machinery, etc. does not impact the asset-liability status - high-revenue expenditure indicates poverty and backwardness of the economy. • Capital Expenditure: one-time expenses, acquisition of a tangible or intangible asset, or payment of liabilities - impacts asset-liability status - improves the productive capacity of the economy - high capital expenditure indicates lack of private investment in the economy”
Why relevant

Defines revenue expenditure as expenditures that do not create physical or financial assets and are for normal functioning (operating-type expenses).

How to extend

Compare this definition with the nature of equity financing (does issuing shares create a lasting asset or is it an operating expense?) to infer classification.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > 2. Capital Expenditure > p. 108
Strength: 4/5
“Capital expenditure results in the acquisition of a tangible or intangible asset or payment of liabilities. Thus, it impacts the asset-liability status of the Government. Capital expenditures are focussed on GDP growth and thereby incurred on building durable assets like highways, multipurpose dams, irrigation projects, buying machinery and equipment. They are non-recurring type of expenditures also in the form of capital investments.”
Why relevant

Reiterates that capital expenditure results in acquisition of tangible/intangible assets or affects asset-liability status, focusing on one-time/durable investments.

How to extend

A student could ask whether equity financing changes the firm's asset-liability status (it increases equity capital) and thus resembles capital expenditure in impact terms.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > Government Budgeting > p. 189
Strength: 2/5
“Acquiring new technology is capital expenditure.• 2. Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure. Select the correct answer using the code given below: • (a) 1 only• (b) 2 only• (c) Both 1 and 2• (d) Neither 1 nor 2• 18. With reference to the Indian economy, consider the following statements: [2022] • 1. A share of the household financial savings goes towards government borrowings.• 2. Dated securities issued at market-related rates in auctions form a large component of internal debt: Which of the above statements is/are correct? • (a) 1 only• (b) 2 only• (c) Both 1 and 2• (d) Neither 1 nor 2”
Why relevant

Contains a direct (exam-style) statement that 'Debt financing is considered capital expenditure, while equity financing is considered revenue expenditure' presented as a proposition to be judged.

How to extend

Treat this as an example of a contested classification to be tested against the definitions above and by consulting corporate accounting rules (outside these snippets) for resolution.

Pattern takeaway: UPSC loves mixing 'Sources of Funds' (Receipts) with 'Application of Funds' (Expenditure) to confuse you. They test the boundary between Corporate Accounting and Public Finance, but the core logic (Asset/Liability test) remains universal.
How you should have studied
  1. [THE VERDICT]: Sitter (Statement 1) + Conceptual Trap (Statement 2). Source: NCERT Macroeconomics Class XII (Chapter 5: Government Budget).
  2. [THE CONCEPTUAL TRIGGER]: The 'Budgetary Classification' of funds—distinguishing between Receipts vs. Expenditures and Capital vs. Revenue accounts.
  3. [THE HORIZONTAL EXPANSION]: Memorize the 4 quadrants: 1. Revenue Receipts (Tax, Non-tax) 2. Capital Receipts (Debt, Disinvestment, Recovery of loans) 3. Revenue Expenditure (Salaries, Pensions, Subsidies, Interest) 4. Capital Expenditure (Infra, Loans disbursed, Repayment of debt). Special Case: Effective Capital Expenditure.
  4. [THE STRATEGIC METACOGNITION]: Apply the 'Asset-Liability Test' to every item. Does it create an asset? Does it reduce a liability? If yes -> Capital. If no -> Revenue. Statement 2 fails because 'Financing' is an Inflow (Receipt), not an Outflow (Expenditure).
Concept hooks from this question
📌 Adjacent topic to master
S1
👉 Capital vs Revenue Expenditure - asset creation test
💡 The insight

Spending that creates physical or financial assets is classified as capital expenditure, whereas routine operational spending is revenue expenditure.

High-yield for budget/accounting questions: it is the primary rule to classify expenditures in public finance and corporate accounting. Mastering this helps answer classification items, budget-impact questions, and distinctions between plan/non‑plan or revenue/capital items across GS papers.

📚 Reading List :
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.4 Budget Classification > p. 152
  • Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Capital Expenditure > p. 70
  • Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Revenue Expenditure > p. 69
🔗 Anchor: "In corporate accounting, is acquiring new technology (e.g., purchasing software,..."
📌 Adjacent topic to master
S1
👉 Tangible vs Intangible assets in expenditure classification
💡 The insight

Acquisition of intangible assets (e.g., software) qualifies as capital expenditure just as buying physical equipment does.

Important for distinguishing capitalisation decisions in accounting and public finance questions; links to topics like amortisation, depreciation, and treatment of IT investments. Enables candidates to handle tech-related classification and related fiscal impact questions.

📚 Reading List :
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > 2. Capital Expenditure > p. 108
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > CHAPTER SUMMARY > p. 125
🔗 Anchor: "In corporate accounting, is acquiring new technology (e.g., purchasing software,..."
📌 Adjacent topic to master
S1
👉 Asset–liability impact and fiscal implications of capital expenditure
💡 The insight

Capital expenditure alters the asset-liability position and is treated as investment that affects productive capacity and fiscal choices.

Helps answer questions on fiscal deficit priorities, budgetary trade-offs between recurring and investment spending, and long-term growth implications. Useful for linking public finance concepts to macroeconomic outcomes and policy debates.

📚 Reading List :
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > CHAPTER SUMMARY > p. 125
  • Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > 5.2.1 Measures of Government Deficit > p. 72
🔗 Anchor: "In corporate accounting, is acquiring new technology (e.g., purchasing software,..."
📌 Adjacent topic to master
S2
👉 Capital vs Revenue Expenditure — asset creation vs routine spending
💡 The insight

Capital expenditure creates physical or financial assets or reduces liabilities, while revenue expenditure covers routine operating expenses that do not create assets.

High-yield for public finance questions: distinguishing capital and revenue expenditure clarifies whether spending improves productive capacity or is recurring consumption. It connects to budget classification, public investment debates, and questions on fiscal policy and development impact. Mastery enables answering questions on expenditure composition and its macroeconomic implications.

📚 Reading List :
  • Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Capital Expenditure > p. 70
  • Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Revenue Expenditure > p. 69
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > CHAPTER SUMMARY > p. 125
🔗 Anchor: "In corporate accounting, is debt financing (raising funds by borrowing) classifi..."
📌 Adjacent topic to master
S2
👉 Deficit financing and borrowing — purpose and implications
💡 The insight

Deficit financing refers to meeting excess expenditure by borrowing or other non-receipt means and can be used to finance either capital creation or routine expenditures.

Essential for UPSC topics on fiscal deficit and debt management: understanding why governments borrow and what borrowings finance helps assess growth trade-offs and policy choices. This concept links to macroeconomic stability, fiscal consolidation, and public investment prioritisation questions.

📚 Reading List :
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > Effective revenue deficit' and 'effective capital expenditure' > p. 154
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > Is it a Necessary Evil? > p. 114
  • Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > 5.2.1 Measures of Government Deficit > p. 72
🔗 Anchor: "In corporate accounting, is debt financing (raising funds by borrowing) classifi..."
📌 Adjacent topic to master
S2
👉 Treatment of interest and debt servicing in budgets
💡 The insight

Interest payments on borrowings are treated as revenue expenditure and form part of committed routine outflows affecting revenue deficits.

Important for questions on fiscal sustainability and budgetary constraints: recognising interest as a revenue expense explains limited fiscal space and why high debt servicing reduces funds for capital investment. It helps tackle questions on debt dynamics and policy measures to reduce fiscal burden.

📚 Reading List :
  • Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Revenue Expenditure > p. 69
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > II. Revenue Deficit > p. 110
🔗 Anchor: "In corporate accounting, is debt financing (raising funds by borrowing) classifi..."
📌 Adjacent topic to master
S3
👉 Capital vs Revenue Expenditure — core definitions
💡 The insight

Classification hinges on whether an outlay creates a physical or financial asset or merely meets recurring operational needs.

High-yield for budgeting and public finance questions: mastering this distinction helps answer questions on fiscal deficits, asset formation, and classification of government spending. It connects to topics on budgetary presentation and the impact of expenditures on asset‑liability statements.

📚 Reading List :
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > CHAPTER SUMMARY > p. 125
  • Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > Revenue Expenditure > p. 69
🔗 Anchor: "In corporate accounting, is equity financing (raising funds by issuing shares) c..."
🌑 The Hidden Trap

Effective Capital Expenditure. The Centre often gives 'Grants-in-aid' to States (technically Revenue Expenditure for Centre) which States use to build bridges (Capital Asset). The concept of 'Effective Capital Expenditure' captures this hidden Capex.

⚡ Elimination Cheat Code

The 'Direction of Money' Hack. 'Financing' means raising money (Money comes IN). 'Expenditure' means spending money (Money goes OUT). Statement 2 says 'Financing is Expenditure'. This is a contradiction in terms (Inflow = Outflow). Immediate elimination.

🔗 Mains Connection

GS3 Investment Models (PPP): 'Viability Gap Funding' (VGF) provided by the Government is technically Revenue Expenditure for the state, but it supports Capital formation in the private sector. This links fiscal classification directly to infrastructure growth.

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SIMILAR QUESTIONS

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With reference to 'National Investment and Infrastructure Fund', which of the following statements is/are correct ? 1. It is an organ of NITI Aayog. 2. It has a corpus of ₹ 4,00,000 crore at present. Select the correct answer using the code given below :

IAS · 2015 · Q100 Relevance score: -0.79

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IAS · 2011 · Q45 Relevance score: -1.08

With reference to the Finance Commission of India, which of the following statements is correct?

IAS · 2024 · Q50 Relevance score: -1.16

With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements : 1. CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities. 2. CSR rules do not specify minimum spending on CSR activities. Which of the statements given above is/are correct ?

IAS · 2002 · Q87 Relevance score: -1.33

With reference to the Indian Public Finance consider the following statements: 1. External liabilities reported in Union Budget are based on historical exchange rates 2. The continued high borrowing has kept the real interest rates high in the economy 3. The upward trend in the ratio of Fiscal Deficit to GDP in recent years has an adverse effect to private investments. 4. Interest payments is the single largest component of the non-plan revenue expenditure of the Union Government. Which of these statements are correct ?