Which of the following is a component of revenue expenditure of the government?
A. Interest payments
B. Loans to state governments
C. Expenditure on construction of roads
D. Expenditure on acquisition of land
Answer: Option A
Solution (By JKSSB Mock Tests)
Revenue expenditure does not create assets or reduce liabilities. Interest payments are a major component of revenue expenditure. Acquisition of land, loans and construction create assets and are capital expenditure.
Explanation:
Ad valorem is a classification based on the method of assessment (percentage of value). Based on impact on distribution, taxes are progressive, proportional or regressive.
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