Q.(Answer any two from questions 23-26) Explain any three components of capital receipts.
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →Capital receipts either create a government liability (borrowing) or reduce a government asset (recovery of loans, disinvestment) — three such components explained below.
-
Borrowings: When the government raises funds by taking loans — from the public (market borrowings), from the Reserve Bank of India, or from foreign governments and institutions — this creates a liability that must be repaid with interest in future. Since it increases the government's outstanding debt, it is classified as a capital receipt rather than revenue.
-
Recovery of loans: The government, in earlier years, advances loans to state governments, public sector enterprises, and other parties. When these loans are repaid, the repayment reduces a financial asset the government held (the right to receive that money back) — hence it is treated as a capital receipt, not revenue.
…
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.