Which of the following is classified as a 'Capital Receipt' in the Union Budget of India?
- Income Tax collections
- Dividends from Public Sector Undertakings
- Recovery of loans granted to State Governments
- Grants received from foreign governments
Answer: Recovery of loans granted to State Governments
Capital receipts are those government receipts that either create a liability (like fresh borrowings) or cause a reduction in the government's assets (like the recovery of past loans or disinvestment of PSUs). Tax revenues and dividends are 'Revenue Receipts' because they neither create liabilities nor reduce core assets.