Budget and fiscal terms

1. Capital expenditure: spending that creates assets or cuts debt, such as roads, dams, machinery and repaying loans.
2. Revenue expenditure: spending that creates no asset, such as salaries, pensions, interest payments and subsidies.
3. Annual Financial Statement: the constitutional name of the Union Budget, under Article 112.
4. Direct tax: a tax paid to the government by the same person it falls on, such as income tax and corporation tax.
5. Source: https://www.indiabudget.gov.in/

Answer: Capital expenditure

1. Statement 1 is wrong: it pairs Capital receipts with "total expenditure minus total receipts other than borrowings, which is the government’s total borrowing need". In fact, Capital receipts: money the government gets by borrowing, recovering loans it gave or selling assets (disinvestment).
2. Statement 2 is wrong: it pairs Contingency Fund of India with "the main government account into which all revenues, loans raised and loan repayments go". In fact, Contingency Fund of India: a fund placed at the President’s disposal for urgent, unforeseen spending (Article 267).
3. Source: https://www.indiabudget.gov.in/

Answer: Neither 1 nor 2

1. Pair 1 is correct: Annual Financial Statement: the constitutional name of the Union Budget, under Article 112.
2. Pair 2 is wrong: Primary deficit is not revenue deficit minus grants given for creating capital assets. Primary deficit: fiscal deficit minus interest payments.
3. Pair 3 is wrong: Direct tax is not fiscal deficit minus interest payments. Direct tax: a tax paid to the government by the same person it falls on, such as income tax and corporation tax.
4. So 1 of the 3 pairs is correctly matched.
5. Source: https://www.indiabudget.gov.in/

Answer: Only one pair