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Q. Consider the following statements:
- Capital receipts create a liability or cause a reduction in the assets of the Government.
- Borrowings and disinvestment are capital receipts.
- Interest received on loans creates a liability of the Government.
Which of the statements given above are correct?
✅ Correct Answer: A. I and II only
Explanation:
- Statement I is correct: Capital receipts either create liabilities (like borrowings) or reduce assets (like disinvestment).
- Statement II is correct: Borrowings and disinvestment are typical capital receipts.
- Statement III is incorrect: Interest received on loans is revenue income and does not create any liability for the government.
Source: https://www.indiabudget.gov.in/budget2011-2012/ub2011-12/rec/cr.pdf
