| Which of the following activities would be included in the revenue expenditure of the Central |
| Government? |
| 1. Expenditure on building roads |
| 2. Interest payments |
| 3. Grants to State Governments |
| Select the correct answer using the codes given below. |
A) 1 and 3
B) Only 2
C) 2 and 3
D) (d) All of these
Correct Answer: C
Solution :
[c] Revenue expenditure consists of all those expenditures of the Government, which do not result in creation of physical or financial assets. 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).
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