BY BIJENDRA KUMAR SINGH SINGH

BUDGET
(Article – 112)

BUDGET

Expenditure
Receipts
s

Revenue Capital Revenue Capital

Receipt Receipt Expenditure Expenditure

Tax Non-Tax
Borrowings,
Ways,
Revenue Revenue Construction
Disinvestment Salaries, of roads,
, Recovery of Subsidies, airports,
Loans. Payment of Payment of
Interest. Loans.
All kinds of Fees,
Direct Fines,
& dividend,
escheat.
Indirect Tax.

Some examples of direct taxes

• STT- Security transaction tax
• CGT - Capital Gains tax
• Corporate Tax
• Wealth Tax (1957) (2017 scarped)
• MAT (Minimum Alternate Tax)
Revenue Receipts :- Those receipts which are not created by Selling public assets. Apart from this they do not
Increase Public liabilities, It can be divided into two parts.

REVENUE RECEIPT
TAX REVENUE

NON-TAX
REVENUE

Tax Receipts
(1) Direct Taxes: Paid by some person on which it is Imposed.
Example: Income Tax

Old Tax Slabs New Tax Slabs

Up to Rs 2.5 lakhs Nil Up to Rs 2.5 Lakhs Nil
Rs 2.5 – 5 Lakhs 5% Rs 2.5 – 5 Lakhs 5%
Rs 5 – 10 Lakhs 20% Rs 5 – 7.5 Lakhs 10%
Rs 10 Lakhs & Above 30% Rs 7.5 – 10 Lakhs 15%
- - Rs 10 – 12.5 Lakhs 20%
- - Rs 12.5 – 15 Lakhs 25%
- - Rs 15 Lakhs & Above 30%

Income tax slabs under new tax regime for FY 2023-24:

Income Tax Slab Tax Rate (%)
Up to 3 Lakhs Nil
3-6 Lakhs 5%
6-9 Lakhs 10%
9-12 Lakhs 15%
12-15 Lakhs 20%
15 Lakhs & Above 30%
(2) MAT – Minimum Alternate Tax.
Imposed on profit of Small Companies and those companies who do not pay corporate tax and hide it on
various exemptions. It is more in news due to retrospective tax. Under it taxes are imposed on previous
years are carry forward.

(3) CGT – It is a tax imposed on the profit obtain by Selling of properties. Capital gains tax is imposed on these
types of benefits although it is mostly imposed on profit gains through selling of equities.
In India for the capital gains from short term equities STCG is imposed with 15% rate which in the annual
budget of 2018-19 government has imposed 10% LTCG for the equities held for more than 1 year and gain
must be 1 lakh or more.

(4) Security Transaction Tax

• Imposed on purchasing and selling of Securities.
• It reduces the betting in Share Market.

Indirect Tax
• Imposed on one and paid by another. It is imposed on both goods and services on their transactions. It is like
production tax.
• It is notable that if an item has less elasticity then despite having the high price its demand would not be
affected much.
• If the item is luxurious, then it is highly elastic which means demand fluctuates. If there is competitive
environment then less tax would be forwarded.

Custom Duty
• It is imposed on both Exportable and Importable Items.
• According to WTO it is called as T.B. (Trade Barriers)

Excise Duty
• Imposed on production, It was imposed by central government in terms of CEN VAT. Sales Tax
• Imposed on Selling of Items by State government. Under VAT it is called as SL VAT.

Entry Tax
• For the movement from one State to another, one has to pay entry tax.
• Octorai Duty
• Movement from one municipality to another Municipality.
• In Maharashtra it is called as LBT (Local body tax) although other states have already abolished it.
Direct taxes are consider as better than Indirect taxes as:
1. Direct taxes are progressive in nature which means it is more on higher income group people while less on
lower income group.
2. While indirect taxes are regressive in nature. It means its incidence is more on poor people and less on rich
people.
3. Indirect taxes are attached with goods and Services so it is purchased by both poor and rich.
4. Direct taxes do not affect prices of goods and Services, while indirect taxes do affect prices in the
commodity. Which changes public choice which also affects the production structure. Which may disturb the
ideal distribution of resources and may pulls down GDP.
• At the time of imposition of Direct tax it should always be checked that the rates should be payable
by the people otherwise it will demotivate the people and which may force people to go for more
rest, which can have the following effects:
• Govt tax revenues decrease.
• GDP may decrease.

Escheat:
If there is a death of the owner of a property and the legal heir is minor, then govt will take the control of the
property and after attaining the age of 18 years government hands over the property to the legal heir and charge
some amount for this care taking work called as Escheat.

Social Assessment
It is imposed by the government on the people of a particular area for the developmental activities done by the
government in that area.

Dividend of PSU
Transfer of profit by RBI, ONGC, SBI. etc

Revenue Receipts
Does not create liabilities also not obtained through selling of public properties.

Capital Receipts
It may create liabilities and it may also be obtained through selling of public properties.

Disinvestment
Done by selling of shares of Public Sector Undertaking.

Expenditures

Revenues Expenditure:
• Those expenditures which do not create public assets and also do not decrease public liabilities.

Example:
• Interest payment, Salaries and pensions to government employees, donations, Subsidy.
Capital Expenditures
• These expenditures create public assets and also reduce public liabilities.

Example:
• Repayment of loans, construction of public properties like Metro, National Highway, Airports.

Note
During 1987-88 there was a new classification of government expenditures:

1. Plan expenditure

2. None plan expenditure

• Plan expenditure was formulated by Planning Commission.

Governmental Plan and Non-Plan Expenditure - Replacing Old Classification

• In 2016, the Indian government said that the distinction between plan expenditure and non-plan expenditure
will be eliminated.
• The government eliminated the designation of Plan & Non-Plan expenditure, which was introduced in 1987–
1988, in the union budget for 2021–2018.

There, a new classification known as "Schemes and Non-schemes" has been introduced.

Public Expenditure

Schemes Non-schemes
centrally Central State's
salary Pension Grants to Defence
sponcered Sector Revenue Subsidies Expenditure
schemes Schemes
Payments Payments
Share
States

Following Institution and Commissions have suggested to Remove Difference between Plan and Non
Plan Expenditure.
• Rangrajan Committee on the analysis of classification of Public Expenditure.

• Bimal Jalan Commission on Efficiency in Public Expenditure

14th Finance Commission

• Planning Commission.

• After the formulation of Niti Ayog. The entire work under plan expenditure is operated under the finance ministry.
Deficits in Budget

Revenue Deficits
• Revenue Expenditure – Revenue receipts

Budget Deficits
• T.E. – T.R.
• (R.E. + CE) – (RR + CR)

Fiscal Deficit
• TE – TR
• (R.E. + C.E) – (Non-Debt CR + T.R)

Primary Deficit
• F.D. – Interest payment

Effective Revenue Deficit

• R.D - Grants to States for capital formation

Before fiscal deficit budget deficit concept was in operation. If the budget deficit was more than zero than it was
being financed by borrowing from reserve bank or by reducing cash balances of government with RBI. That why it
was called as Monetized Deficit because new currency equals to deficit would come in the economy.

Fiscal Deficit: Introduced on 1st April 1997 on recommendation of Sukhmoi Chakravarty Committee. It has
brought more transparency and accountability in budget making process.

TAX EXPENDITURE AND RETROSPECTIVE TAX

Q. What is the meaning of the term tax expenditure? Taking housing sector as an example, discuss how
it influences the budgetary policies of the government. (Mains, 2013).

Tax Expenditure
➢ It indicates how much more revenue could have been collected by the government if tax be levied.
➢ It is also called as revenue foregone or Tax preference.
➢ It accounts for a major loss of revenue due to rebates & exemptions.
 Tax Expenditure in Housing Sector
➢ Exemptions allowed for HRA (income Tax) & Mediclaim.
➢ Exemptions allowed for interest payment & principal repayment for housing loans (CLSS).
➢ For PM Awas Yojana, very high interest and tax break have been provided.
➢ Exemption of rental income.

Retrospective Tax
i. It allows the government to tax certain products, deals or transactions that happened behind the date on
which the law is passed.
ii. On August 9, the Rajya Sabha approved the Taxation Laws (Amendment) Bill 2020. The decision will help the
center project India as investor friendly nation.
iii. It was introduced by P. Mukherjee in 2012.
iv. Vodafone Case –
✓ May 2007 – Vodafone acquired 67% stake in Hutchison Essar $ 11.2 billion.
✓ Vodafone International hording bought the stake of Hutchison Telecommunications International
Ltd. In Hutchison Essar.
✓ Deal between companies based overseas: executed in Cayman Islands.

v. October 30, 2009 – Income tax department served notice to Vodafone International Holdings for non-
deduction of tax at source on the $ 11.2 billion transaction.
vi. October 30, 2010 – IT department ordered Vodafone to furnish Rupees 11,218 crore under section 201 of IT
Act.

vii. April 29, 2011 – Rupees 7, 900 cr. Penalty was imposed.
LITIGATION:
✓ September 8, 2010 – The Bombay High Court upheld the tax-authorities decision.
✓ Department raised tax demand in the subsequent months.
✓ January 20, 2012 – Supreme Court set aside Bombay High Court decision, quash tax & interest
demand.
✓ It (SC) said transaction was between two overseas entities and Indian tax authorities had no
territorial tax jurisdiction.

viii. Feb 17, 2012 – Government filed review petition.

✓ March 20, 2012 – Supreme Court dismissed the review petition.

The Retrospective Amendment

• 2012 Indian Government amended the Income Tax act retrospectively.
• Section 119 of the Finance Act validations the tax levied on Vodafone.
• Government said the amendment was only a clarification to remove ambiguity and provide certainty.

Tax Demand Back on Table

• January 3, 2013 – IT department raised a fresh demand for rupees 11, 218crore.

Arbitration
• April 2014 – Vodafone saved arbitration notices under the India-Netherlands treaty.
 • New government did not roll back demand but said no fresh action under retrospective tax.

➢ A fresh demand was issued in Feb 12, 2016 rupees 22,100 crore tax.
➢ September 25, 2020 – The Hague based arbitration court ruled in favour of Vodafone.
➢ December 21, 2020 – India challenges arbitration award at Singapore.

Cairn Energy
1) In 2006 – Cairn UK had transferred its shares in Cairn India holding to Cairn India.
➢ In 2011, Cairn energy sold nearly its entire holding in the India unit to Vedanta resources, owned by
Anil Aggarwal (except 9.8% share).

2) In 2014, tax, tax department issued a tax notice to Cairn Energy and sought to levy CGT on the 2006
transactions armed with a retrospective amendment enacted in 2012.

NOTE: The change in the tax provision meant that all transactions over the previous five decades could be
brought under the tax net.

3) This Act (2012) brought nearly a dozen transactions under the IT departments taxable net.

4) Cairn India had a residual 9.8% stake in the Indian Unit after its sale to Vedanta.
➢ In 2014, the IT department went on to freeze the remaining shares of Cairn Energy as part of its
efforts to recover the tax dues.

5) Subsequently after Cairn India’s merger with Vedanta in 2017, Cairn Energy held 95% stake in Vedanta Ltd
along with some preference share valued at over billion $ 1.
➢ But this holding was soon taken away by IT department.
➢ Cairn Energy’s 4.95% shares in Vedanta as of December 2017 were transferred to Tax Recovery
office. New Delhi in the Jan March 2018 period.
➢ The tax department then started selling these shares as part of its efforts to recover its dues.
➢ It also withheld tax refunds amounting to $ 222.8 million due to Cairn UK in another matter.
➢ It also seized dividends amounting to $ 159.8 million and seized proceed due to the company from
redemption of preference shares as part of its efforts to recover the dues.
➢ Cairn Energy decided to initiate internal Arbitration against India in 2015 in Hague.
➢ The Permanent court of Arbitration ruled in Cairn Energy’s favour in December 2020, hands it an
award of $ 1.7B.

However, earlier this month, Cairn successfully managed to freeze residential real estate owned by the Indian
Government in Paris, impacting around 20 Centrally located properties valued at more than $ 20 million.

Although Cairn Energy told that it prefers an amicable settlement with the Indian Government.
So, after these international reverses Modi government abolished it in August 2021.

Probable Questions for Mains -

Q1. “GST is considered as one of the biggest indirect tax reforms”. In the light of the statement do the critical
analysis of GST in India and also the role of GST Council as a fiscal Council.
Q2. Do you think that retrospective tax was outdated in the present scenario. In the light of Vodafone and Cairn
energy case discuss the adverse impact of this tax on the Indian Economy.

Q3. DTAA and Round Tripping help in avoiding money laundering in India. Discuss

Q4. BEPS is an international collaboration to end tax avoidance. Explain.

PYQs on Fiscal Policy (PT)

Q1. Corporation tax: [1995]

(a) Is levied and appropriated by the states

(b) Is levied by the union and collected and appropriated by the states
(c) Is levied by the union and shared by the Union and the states
(d) Is levied by the Union and belongs to it exclusively

Ans: (d)

Q2. A redistribution of income in a country can be best brought about through: [1996]

(a) Progressive taxation combined with progressive expenditure

(b) Progressive taxation combined with regressive expenditure
(c) Regressive taxation combined with regressive, expenditure
(d) Regressive taxation combined with progressive expenditure

Ans: (b)

Q3. The Minimum Alternative Tax (MAT) was introduced in the Budget of the Government of India for the year:
[1997]

(a) 1991-92
(b) 1992-93
(c) 1995-96
(d) 1996-97

Ans: (d)

Q4. Match List-1 with List-2 and select the correct answer. [1997]

List-1 (Committee) List-2 (Chaired by)

A. Disinvestment of shares in Public 1. Rajah Chelliah

Sector Enterprises
B. Industrial Sickness 2. Omkar Goswami
C. Tax Reforms 3. R.N. Malhotra
D. Reforms in Insurance Sector 4. C. Rangarajan

Ans: A-4, B-2, C-1, D-3

Q5. Which one of the following statements regarding the levying, collecting and distribution of Income Tax is
correct? [1999]

(a) The Union levies, collects and distributes the proceeds of income tax between itself and the states.
(b) The Union levies, collects and keeps all the proceeds of income tax to itself
(c) The Union levies and collects the tax but all the proceeds are distributed among the states
 (d) Only the surcharge levied on income tax is shared between the Union and the states

Ans: (a)

Q6. Match List-1 with List-2 and select the correct answer using the codes given below the lists: [2001]

List-1 (Term) List-2 (Explanation)

A. Fiscal deficit 1. Excess of Total Expenditure over Total Receipts

B. Budget deficit 2. Excess of revenue expenditure over revenue receipts
C. Revenue deficit 3. Excess of Total Expenditure over Total Receipts less borrowings
D. Primary deficit 4. Excess of Total Expenditure over Total Receipts less borrowings
and interest Payments

Ans: A-3, B-1, C-2, D-4

Q7. Consider the following taxes: [2001]

1. Corporation tax
2. Customs duty
3. Wealth tax
4. Excise duty

Which of these is/are indirect taxes?

(a) 1 only
(b) 2 and 4
(c) 1 and 3
(d) 2 and 3

Ans: (b)

Q8. With reference to the Indian Public Finance, consider the following statements: [2002]

(1) External liabilities reported in the Union Budget are based on the 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 to Fiscal deficit of GDP a recent years has an adverse effect on private
investment
(4) Interest payments is the single largest component of the non-plan revenue expenditure of the Union
Government

Which of these statements are correct?

(a) 1,2 and 3

(b) 1 and 4
(c) 2,3 and 4
(d) 1,2,3 and 4

Ans: (c)

Q9. Consider the following statements: [2003]

In India, stamps duties on financial transactions are:

(1) Levied and collected by the State Government

(2) Appropriated by the Union Government

Which of these statements is/are correct?

 (a) Only 1
(b) Only 2
(c) Both 1 and 2
(d) Neither 1 nor 2

Ans: (d)

Q10. Which one of the following statements is correct? Fiscal Responsibility and Budget Management Act
(FRBMA) concerns: [2006]

(a) Fiscal Deficit only

(b) Revenue Deficit only
(c) Both Fiscal deficit and revenue deficit
(d) Neither fiscal deficit nor revenue deficit

Ans: (c)

Q11. Consider the following: [2009]

(1) Fringe Benefit Tax

(2) Interest Tax
(3) Securities Transaction Tax

Which of the above is/are Direct Tax/Taxes?

(a) 1 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1,2 and 3

Ans: (d)

Q12. Which one of the following is not a feature of “value Added Tax”? [2011-01]

(a) It is multi-point destination-based system of taxation.

(b) It is a tax levied on value addition at each stage of transaction in the production distribution chain.
(c) It is a tax on final consumption of goods or services and must ultimately be borne by the consumer.
(d) It is basically a subject of the Central Government and the state governments are only a facilitator for its
successful implementation.

Ans: (d)

Q13. All revenues received by the Union Government by way of taxes and other receipts for the conduct of
government business are credited to the? [2011-01]

(a) Contingency Fund of India

(b) Public Account
(c) Consolidated Fund of India
(d) Deposits and Advances Fund

Ans: (c)

Q14. Consider the following statements: [2018-01]

(1) The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a
debt to GDP ratio of 60% for the general (combined) government by 202, comprising 40% for the Central
Government and 20% for the State Governments.
 (2) The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the
State Governments.
(3) As per the constitution of India, it is mandatory for a State to take the Central Government’s consent for
rising any loan if the former owes any outstanding liabilities to the latter.

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1,2 and 3

Ans: (c)

Q15. Consider the following items: [2018-01]

(1) Cereal grains hulted

(2) Chicken eggs cooked
(3) Fish processed and canned
(4) Newspaper containing advertising material

Which of the above items is/are exempted under GST (Goods and Services Tax)?

(a) 1 only
(b) 2 and 3 only
(c) 1,2 and 4 only
(d) 1,2,3 and 4

Ans: (c)

Q16. With reference to India’s decision to levy an equalization tax of 6% on online advertisement services offered
by non-resident entities, which of the following statements is/are correct? [2018-01]

(1) It is introduced as a part of the Income Tax Act.

(2) Non-resident entities that offer advertisement services in India can claim a tax credit in their home country
under the “Double Taxation Avoidance Agreements”.

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

Ans: (d)

Q17. Which of the following is not a recommendation of the task force on direct taxes under the chairmanship of
Dr. Vijay L. Kelkar in the year 2002? [2004]

(a) Abolition of Wealth Tax

(b) Increase in the exemption limit of personal income to Rs. 1.20 lakh for windows
(c) Elimination of standard deduction
(d) Exemption from tax on dividends and capital grains from the listed equity

Ans: (b)

Q18. In India, deficit financing is used for raising resources for [2013-1]

(a) Economic development

(b) Redemption of public debt
(c) Adjusting the balance of payments
 (d) Reducing the foreign debt

Ans: (a)

Q19. Which of the following are among the non-plan expenditures of the Government of India? [1995 – 1997]

(1) Defence expenditure

(2) Subsidies
(3) All expenditures linked with the previous plan periods
(4) Interest payment

Codes:

(a) 1 and 2
(b) 1 and 3
(c) 2 and 4
(d) 1, 2, 3, and 4

Ans: (d)

Q20. A great deal of Foreign Direct Investment (FDI) to India comes from Mauritius than from many major and
mature economies like UK and France. Why? [2010]

(a) India has preference for certain countries as regards receiving FDI
(b) India has double taxation avoidance agreement with Mauritius
(c) Most citizen of Mauritius have ethnic identity with India and so they feel secure to invest in India
(d) Impending dangers of global climatic change prompt Mauritius to make huge investment in India

Ans: (b)

Q21. Which one of the following is responsible for the preparation and presentation of Union Budget to the
Parliament? [2010]

(a) Department of Revenue

(b) Department of Economic Affairs
(c) Department of Financial Services
(d) Department of Expenditure

Ans: (b)

Q22. Consider the following actions by the Government: [2010]

(a) Cutting the tax rates

(b) Increasing the government spending
(c) Abolishing the subsidies in the context of economic recession

Which of the above actions can be considered a part of the

''fiscal stimulus" package?

(a) 1 and 2 only

(b) 2 only
(c) 1 and 3 only
(d) 1,2 and 3

Ans: (a)

Q23. In India, the tax proceeds of which one of the following as a percentage of gross tax revenue has significantly
declined in the last five years? [2010]

(a) Service tax

 (b) Personal income tax
(c) Excise duty
(d) Corporation tax

Ans: (c)

Q24. Consider the following statements:

In India, taxes on transactions in Stock Exchanges and Futures Markets are [2010]

1. levied by the Union

2. collected by the States

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither I nor 2

Ans: (a)

Q25. Which one of the following statements appropriately describes the "fiscal stimulus"? [2011-01]

(a) It is a massive investment by the government in manufacturing sector to ensure the supply of goods to meet
the demand surge caused by rapid economic growth.
(b) it is an intense affirmative action of the government to boost economic activity in the country.
(c) lt is government's intensive action on financial Institutions to ensure disbursement of loans to agriculture
and allied sectors to promote greater food production and contain food inflation.
(d) It is an extreme affirmative action by the government to pursue its policy of financial inclusion.
Ans: (b)

Q26. What is the difference between “vote-on-account” and "interim budget"? [2011-01]

1. The provision of a "vote-on account" is used by a regular Government, while an "interim budget” is a
provision used by a caretaker Government
2. A "vote-on-account" only deals with the expenditure in Government budget, while an "interim budget”
includes both expenditure and receipts

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither I nor 2

Ans: (b)

Q27. With reference to Union Budget, which of the following is/are covered under Non-Plan Expenditure?
[2014-01]

1. Defence expenditure
2. Interest payments
3. Salaries and pensions
4. Subsidies

Select the correct answer using the code given below.

 (a) 1 only
(b) 2 and 3 only
(c) 1,2, 3 and 4
(d) none

Ans: (c)

Q28. The sales tax you pay while purchasing a toothpaste is a [2014-01]

(a) tax imposed by the Central Government

(b) tax imposed by the Central Government but collected by the State Government
(c) tax imposed by the State Government but collected by the Central Government
(d) tax imposed and collected by the State Government

Ans: (d)
Q29. There has been a persistent deficit budget year after year.
Which of the following actions can be taken by the government to reduce the deficit? [2015-01]

1. Reducing revenue expenditure

2. Introducing new welfare schemes
3. Rationalizing subsidies
4. Expanding industries

Select the correct answer using the code given below.

(a) 1and 3 only

(b) 2 and 3 only
(c) 1 only
(d) 1,2, 3 and 4

Ans: (a)

Q30. With reference to the Fourteenth Finance Commission, which of the following statements is/ are correct?
[2015-01]

1. It has increased the share of States in the central divisible pool from 32 percent to 42 percent.
2. It has made recommendations concerning sector-specific grants.

Select the correct answer using the code given below.

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither I nor 2

Ans: (a)

Q31. What is/are the most likely advantages of implementing 'Goods and Services Tax (GST)'? [2017-01]

1. It will replace multiple taxes collected by multiple authorities and will thus create a single market in India.
2. It will drastically reduce the 'Current Account Deficit’ of India and will enable it to increase its foreign
exchange reserves.
3. lt will enormously increase the growth and size of economy of India and will enable it to overtake China in
the near future.

Select the correct answer using the code given below:

(a) 1 only
(b) 2 and 3 only
(c) I and 3 only
(d) 1, 2 and 3

Ans: (a)

Q32. Consider the following statements: [2017-01]

1. Tax revenue as a per cent of GDP of India has steadily increased in the last decade.
2. Fiscal deficit as a per cent of GDP of India has steadily increased in the last decade.

Which of the statements given above is/are correct?

(a) I only
(b) 2 only
(c) Both I and 2
(d) Neither I nor 2

Ans: (d)

Q33. Agricultural income tax is assigned to the State Government by: [1995]
(a) Finance Commission
(b) National Development Council
(c) Inter-State Council
(d) The Constitution of India

Ans: (d)

Q34. There has been a persistent deficit budget year after year.
Which action/actions of the following can be taken by the Government to reduce the deficit? [2016-01]
(a) Reducing revenue expenditure
(b) Introducing new welfare schemes
(c) Rationalizing subsidies
(d) Reducing import duty

Select the correct answer using the code given below.

(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, 3, and 4

Ans: (c)

Q35. Which of the following is/are included in the capital budget of the Government of India? [2016-01]

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.

(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
Ans: (d)