economics medium MCQ

Which of the following is classified as a 'Capital Receipt' in the Union Budget of India?

  1. Income Tax collections
  2. Dividends from Public Sector Undertakings
  3. Recovery of loans granted to State Governments
  4. 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.

Topic Public Finance - Budgeting
Exam Relevance UPSC Prelims, SSC CGL, Banking
More economics Questions Back to all questions