Explanation: All the areas which get capital from the government are part of the capital expenditure. It includes so many heads in India —

• Loan Disbursals by the Government: The loans forwarded by the government might be internal (i.e., to the states, UTs, PSUs, FIs, etc.) or external (i.e., to foreign countries, foreign banks, purchase of foreign bonds, loans to IMF and WB, etc.).
• Loan Repayments by the Government: Again, loan payments might be internal as well as external. This consists of only the capital part of the loan repayment as the element of interest on loans is shown as a part of the revenue expenditure.
• Plan Expenditure of the Government: This consists of all the expenditures incurred by the government to finance the planned development of India as well as the central government financial supports to the states for their plan requirements.
• Capital Expenditures on Defense by the Government: This consists of all kinds of capital expenses to maintain the defense forces, the equipment purchased for them as well as the modernization expenditures. It should be kept in mind that defense is a non-plan expenditure which has capital as well as revenue expenditures in its maintenance. The revenue part of expenditure in the defense is counted in the revenue expenditures by the government.

Source: Ramesh Singh