Which of the following statements is correct regarding Capital Expenditure? I. Capital expenditure result in creation of physical or financial assets or reduction in financial liabilities. II. Non-plan capital expenditure covers various general, social and economic services provided by the government.

Explanation

Capital expenditure (CapEx) involves vital government spending that directly creates tangible physical or financial assets (like infrastructure) or significantly reduces existing financial liabilities, heavily contributing to long-term economic growth.