Explanation:

Correct Option: (b) Explanation:  Statement 2 is incorrect: The GoCA includes the Government of India grants forwarded to the states & UTs for the implementation of the centrally sponsored programmes. Supplementary notes: Effective revenue de fi cit (ERD)  It is a term introduced in the Union Budget 2011–12.  The conventional revenue expenditures include all the grants which the Union Government gives to the state governments and the UTs some of which create assets (though these assets are not owned by the Government of India but the concerned state governments and the UTs).  Such revenue expenditures contribute to the growth in the economy and therefore, should not be treated as unproductive in nature like other items in the revenue expenditures.  By this rationale, a new methodology was introduced to capture the ‘effective revenue de fi cit’, which is the Revenue De fi cit ‘excluding’ those revenue expenditures of the Government of India which were done in the form of GoCA (grants for creation of capital assets).  Grants for creation of capital assets are de fi ned as “the grants-in-aid given by the Central Government to the State Governments, constitutional authorities or bodies, autonomous bodies and other scheme implementing agencies for creation of capital assets which are owned by the said entities”.  The GoCA includes the Government of India grants forwarded to the states & UTs for the implementation of the centrally sponsored programmes such as Pradhan Mantri Gram Sadak Yojana, Accelerated Irrigation Bene fi t Programme, etc.