How many of the following are the components of capital receipts?
1. Loans received from foreign governments
2. Grants received from international institutions
3. Small savings schemes
4. Dividend and profits on investments
5. Disinvestment receipts
Select the correct answer using the code given below:
(a). Only two
(b). Only three
(c). Only four
(d). All five
Explanation Capital Receipts: Those receipts of the government which either creates liability or reduces the assets (physical or financial) are called capital receipts.
Item 1 is correct: Loans from foreign governments are considered capital receipts as they create liabilities for the government.
Item 2 is not correct: Grants are considered revenue receipts as they do not create liabilities or reduce assets.
Item 3 is correct: Collections from small savings schemes are capital receipts as they represent borrowings from the public, creating liabilities.
Item 4 is not correct: Earnings from dividends and profits are considered non-tax revenue receipts because they neither create liabilities or reduce assets.
Item 5 is correct: Proceeds from disinvestment are capital receipts as they reduce government assets.
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