Which of the following is a part of the capital receipt of the Government of India ? 1. Disinvestment receipts 2. Interest receipts 3. Small savings 4. Net market borrowing Select the answer using the code given below:
- A.1 and 3 only
- B.2 and 4 only
- C.1, 2, 3 and 4
- D.1, 3 and 4 only
Correct answer
Explanation
The correct answer is D, 1, 3 and 4 only. Disinvestment, small savings and market borrowing either create a liability for the government or reduce its assets, so they are capital receipts; interest received is a revenue receipt.
In the Union Budget a receipt is a capital receipt if it creates a liability, such as borrowing, or reduces assets, such as selling shares in public sector companies or recovering loans. Market borrowing through dated securities and treasury bills is the largest capital receipt. Money from small savings schemes like the Public Provident Fund and National Savings Certificates reaches the government through the National Small Savings Fund and must be repaid, so it is also a capital receipt.
A is wrong because it leaves out net market borrowing. B is wrong because interest receipts are non-tax revenue and it leaves out disinvestment and small savings. C is wrong because interest earned on loans to states and others neither creates a liability nor reduces assets, so it belongs to revenue receipts.
Exam tip: capital receipts = borrowing, recovery of loans, disinvestment; interest and dividends are revenue receipts.
Practice Questions
View allRetail core inflation is calculated excluding which of the following ? 1. Food and beverages 2. Fuel and light 3. Transport and communication 4. Clothing and Education Select the answer using the code given below:
- A.1 and 2 only
- B.1, 2 and 3 only
- C.1, 2, 3 and 4
- D.3 and 4 only
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Retail core inflation is the rise in the Consumer Price Index after leaving out its two most volatile groups, food and beverages and fuel and light.
Read the full explanation →Who among the following has given the concept of Human Development ?
- A.Amartya Sen
- B.Mahbub-ul-Haq
- C.Sukhamoy Chakravarty
- D.G.S. Chaddha
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The Pakistani economist Mahbub-ul-Haq gave the concept of human development and launched the first Human Development Report for the UNDP in 1990.
Read the full explanation →Which one of the following may lead to movement along the demand curve of a commodity?
- A.Change in its price
- B.Change in price of the other commodities
- C.Change in income of the consumer
- D.Change in tastes and preferences of consumers
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A change in a good's own price, with everything else fixed, moves the buyer up or down the same demand curve.
Read the full explanation →Which one of the following is not an assumption in the law of demand?
- A.There are no changes in the taste and preferences of consumers.
- B.Income of consumers remains constant.
- C.Consumers are affected by demonstration effect.
- D.There are no changes in the price of substitute goods.
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The law of demand assumes buyers are not swayed by imitating others; the demonstration effect is in fact one of its exceptions.
Read the full explanation →Which one of the following items is not covered under GST?
- A.Cosmetics
- B.Medical grade oxygen
- C.Jewellery
- D.Petrol
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Petrol is one of the petroleum products kept out of GST for now, so it still bears central excise duty and state VAT.
Read the full explanation →