Consider the followings receipts of the Union Government:1. Recoveries of loans and advances given to state governments2. Disinvestment proceeds of PSUs3. Recoveries of loans from foreign governmentsHow many of the above receipts are non debt capital receipts?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'C'. Can you explain this answer?

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Consider the followings receipts of the Union Government:

1. Recoveries of loans and advances given to state governments

2. Disinvestment proceeds of PSUs

3. Recoveries of loans from foreign governments

How many of the above receipts are non debt capital receipts?

a)
Only one
b)
Only two
c)
All three
d)
None

Correct answer is option 'C'. Can you explain this answer?

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Consider the followings receipts of the Union Government:1. Recoveries...

Usually, there are two main sources of the government’s income – revenue receipts and capital receipts. Revenue receipts comprise both tax and non-tax revenues while capital receipts consist of capital receipts and non-debt capital receipts.
Non-debt creating capital receipts refer to those receipts of the government which lead to a decrease in assets, and not an increase in liabilities. Non-debt capital receipts, also known as NDCR, account for just 3% of the central government’s total receipts.
Broadly, there are two kinds of non debt capital receipts:
- Recoveries of loans and advances and
- Miscellaneous capital receipts
Recoveries of loans and advances: This kind of non debt capital receipts includes:
- Recovery of loans and advances from state governments and union territories with legislature
- Recovery of loans given to foreign governments
- Recovery of loans and advances from PSUs and other autonomous bodies
Miscellaneous Capital Receipt: This includes proceeds from disinvestment in public sector undertakings. The government further classifies disinvestment proceeds into:
- Disinvestment receipts
- Strategic disinvestment
- Listing of PSUs in stock markets and
- Issue of bonus shares
Hence option (c) is the correct answer.

Answered by Notes Wala · View profile

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Consider the followings receipts of the Union Government:1. Recoveries of loans and advances given to state governments2. Disinvestment proceeds of PSUs3. Recoveries of loans from foreign governmentsHow many of the above receipts are non debt capital receipts?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'C'. Can you explain this answer?

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