Capital Receipts of Government
Question
Consider the following statements: I. Capital receipts create a liability or cause a reduction in the assets of the Government. II. Borrowings and disinvestment are capital receipts. III. Interest received on loans creates a liability of the Government. Which of the statements given above are correct?
Options
I and II only
II and III only
I and III only
I, II and III
Explanation
Statements I and II are correct. Statement III is incorrect.
Capital receipts are defined as those that either create a liability (like borrowings) or reduce assets (like disinvestment). Interest received on loans is a revenue receipt because it neither creates a liability nor reduces an asset.
Answer: (a).
Question details
Year
2025
Paper
GS Paper 1
Question
Q10
Subject
Economy
Sub-topic
Fiscal Policy, Taxation & Budget
Type
Statement-based
Difficulty
Medium
Nature
Static
Source hint
NCERT Economy Cl.12 Ch.5
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