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Which of the following will be part of Revenue Expenditure?

A. Subsidies on exports.

B. Interest payments on debt incurred by the government.

C. Loans and advances by the central government to state government.

D. Salaries paid to the government employees.

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 2

Revenue expenditure neither creates assets nor reduces liabilities. Export subsidies (A), interest payments (B) and salaries of government employees (D) are revenue expenditures. Loans and advances to state governments (C) create a financial asset for the centre, so they are capital expenditure. Answer: A, B and D only.

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