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Why are grants for asset creation still considered revenue expenditure?

1. They are spent through government loans
2. They are used only by private sector units
3. They do not create direct central assets
4. They are not included in any budget head

Correct answer: They do not create direct central assets

Solution

Grants for asset creation may lead to assets being created in the hands of another entity, but they do not create direct assets for the central government. Therefore, they are treated as revenue expenditure in budget classification.

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