Which of the following is an example of capital expenditure in the government budget?

Correct option is B

The correct answer is (b) Purchase of military equipment.
· Purchase of military equipment is an example of capital expenditure in the government budget.
· Capital expenditure refers to spending by the government that leads to the creation of assets or reduction in liabilities.
· These expenditures typically have long-term benefits and contribute to infrastructure development, capacity-building, and asset creation.
· Capital expenditures are aimed at enhancing the productive capacity of the economy or improving the quality of public services over the long term.
Facts to remember:
· Here are examples of capital expenditure in government budgets:
· Acquisition of assets: This involves purchasing land, buildings, machinery, equipment, roads, hospitals, railways, and bridges, which contribute to infrastructure development.
· Repayment of loans: This action reduces the government's liabilities by settling outstanding debts.
· Loans and advances: This includes loans and advances extended by the central government to state and union territory governments, government companies, corporations, and other entities, fostering financial assistance and investment.