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How would you distinguish between the revenue and capital receipts of the government?
  1. Revenue receipts are non-redeemable unlike certain capital receipts.
  2. Capital receipts are always debt creating unlike revenue receipts.
Which of the above statements is/are correct?
  • a)
    1 only 
  • b)
    2 only 
  • c)
    Both 1 and 2 
  • d)
    Neither 1 nor 2
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
How would you distinguish between the revenue and capital receipts of ...
  • The main difference between revenue receipts and capital receipts is that in the case of revenue receipts, government is under no future obligation to return the amounti.e., they are non-redeemable. But In case of capital receipts which are borrowings, government is under obligation to return the amount along with Interest.
  • Capital receipts may be debt creating or non-debt creating.
  • Examples of debt creating receipts are—Net borrowing by government at home, loans received from foreign governments, borrowing from RBI. Examples of non-debt capital receipts are—Recovery of loans, proceeds from sale of public enterprises (i.e., disinvestment), etc. These do not give rise to debt.
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How would you distinguish between the revenue and capital receipts of the government? Revenue receipts are non-redeemable unlike certain capital receipts. Capital receipts are always debt creating unlike revenue receipts.Which of the above statements is/are correct?a)1 onlyb)2 onlyc)Both 1 and 2d)Neither 1 nor 2Correct answer is option 'A'. Can you explain this answer?
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