Bhawna went to her old school in New Delhi, where she noticed that there is new building being constructed by the government. According to you, how will this transaction be treated?

Included in capital expenditure

As, the government has initiated a construction process that means expenditure has been incurred. Now, the question is whether it is revenue or capital.

Revenue expenditure do not create any asset nor do they cause reduction in the liability whereas, capital expenditure either reduce a liability or create an asset. Here, an asset (building) is being made, thus, it will be included under capital expenditure of the government.