Q. With reference to Revenue Expenditure in government budgeting, consider the following statements:
1.Revenue expenditure is of a consumptive nature and does not result in the creation of productive assets.
2.Salaries, pensions, subsidies, and interest payments are all components of revenue expenditure.
3.Capital grants given to state governments are included under revenue expenditure.
Which of the statements given above is/are correct?
Answer: A
Notes:
Explanation:
- Revenue expenditure is consumptive and does not create productive assets.
- Items like salaries, pensions, subsidies, and interest payments are typical examples of revenue expenditure.
- Capital grants, by definition, are considered capital expenditure, not revenue expenditure. Only non-capital grants are part of revenue expenditure.
Source: Indian Economy (NCERT)
