SSC CGL 2025 Tier-I · 23 September 2025, Shift 3 · General Awareness · Question 18 of 100

We transcribed this text from the pictures on a candidate's response sheet for this shift; the answer is the key SSC colour-marked on that sheet. Solution last reviewed 13 September 2026.

Where this paper and its answers come from

SSC does not publish CGL question papers or a public answer key. From 2025 the candidate response sheet prints every question and option as a picture, so the text here is transcribed from those pictures for this shift and checked against them independently; where the layout carries meaning, the picture is shown as well. Each answer is the key SSC colour-marked on that sheet. SSC released a tentative key for challenge and later its final one, both only to candidates behind a login, and the sheet does not say which of the two it carries. The solutions are written by UnlockIAS.

Why are grants for asset creation still considered Revenue Expenditure?

(a)They are spent through government loans
(b)They are used only by private sector units
(c)They do not create direct central assets
(d)They are not included in any budget head

Answer

Why

Correct — C. Revenue expenditure is spending that creates no asset and reduces no liability for the government that spends it.

A grant for creating capital assets is money the Centre gives to a state, a local body or another agency. The asset belongs to the recipient, not to the Centre.

So on the Centre's books the grant is revenue expenditure → option (c).

Why the others are wrong

(a)
They are spent through government loans — A grant is not a loan, and how spending is financed does not decide its type. Borrowed money can pay for revenue and capital spending alike.
(b)
They are used only by private sector units — The grants go to states, local bodies and other agencies, so 'only private sector units' is wrong. The test is also not who receives the grant, but who owns the asset.
(d)
They are not included in any budget head — These grants are in the budget. The Union Budget shows grants for creation of capital assets as a line of its own and subtracts them from the revenue deficit to get the effective revenue deficit.

Concept

The budget classifies spending by its effect on the government's own balance sheet.

Capital expenditure creates an asset or reduces a liability: building a highway, repaying a loan.
Revenue expenditure does neither: salaries, interest, subsidies.

A grant to a state for a school building creates an asset, but the state owns it. For the Centre the grant stays revenue expenditure.

The key's phrase 'direct central assets' carries the logic. The asset exists, but the Centre does not own it. That gap is why the effective revenue deficit subtracts these grants from the revenue deficit.

Key facts

Revenue expenditure creates no asset and reduces no liability for the government that incurs it.
Capital expenditure creates assets or reduces liabilities, for example loans to states and repayment of debt.
Grants for creation of capital assets are grants-in-aid to states and other bodies for assets that those bodies own.
Effective revenue deficit = revenue deficit − grants for creation of capital assets.

Study next

Revenue, fiscal, primary and effective revenue deficitsCapital receipts versus revenue receiptsGrants-in-aid to states under Article 275

Common traps

Calling the grant capital expenditure because the money ends up in a building. Classification follows who owns the asset.
Deciding by the source of funds. Borrowing can finance either kind of spending.

Here the classification rule is asked through a case that looks like capital spending. A related deficit measure, the primary deficit, is asked at Tier-II Paper-I, 19 Jan 2026, 11:00, GA Q.5.

Related PYQs

No directly related past PYQ was found.

Topic: Economic Scene — all 144 SSC CGL questions on it, every solved shift.