Question:
The main components of the recurrent expenditure of the government of Sri Lanka are
(1) interest payments, acquisition of real assets, salaries and wages and transfers to households.
(2) interest payments, salaries and wages, capital transfers to public corporations and pensions.
(3) interest payments, salaries and wages, current transfers to households and current transfers to public corporations.
(4) interest payments, salaries and wages, amortisation payments and current transfers to households.
(5) interest payments, salaries and wages, acquisition of financial assets and fertilizer subsidy.
Correct Answer:
(3)
Answer Explanation:
Recurrent expenditure consists of the day-to-day operational expenses of the government. In Sri Lanka, this is heavily dominated by interest payments on debt, salaries and wages for public servants, and current transfers/subsidies (like pensions and welfare). Amortization and asset acquisition are classified as capital expenditure.
Topic: Public Finance Year: 2020
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