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    Question

    Which of the following statements about the Indian budget is incorrect?

    A Non-tax receipts of the government mainly consist of interest and dividends on investment in addition to fees and other receipts for services rendered by the government. Correct Answer Incorrect Answer
    B Interest payments on debt is part of the revenue expenditure. Correct Answer Incorrect Answer
    C All grants to the state governments and union territories except for use of creation of capital assets are treated as revenue expenditure. Correct Answer Incorrect Answer
    D All grants to the state governments and union territories except for use of creation of capital assets are treated as revenue expenditure. Correct Answer Incorrect Answer
    E All grants to the state governments and union territories except for use of creation of capital assets are treated as revenue expenditure. Correct Answer Incorrect Answer

    Solution

    All grants to the states or union territories are treated as revenue expenditure even though a portion of these may be used for creation of capital assets.

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