Which of the following is an example of capital receipt?
A) Borrowings from world Bank to fund Project to Save Tigers
B) Sale of 30% stake in a PSU to private companies
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Both A and B.
Both options given are examples of capital receipts.
A) Borrowings from the World Bank to fund a project to save tigers: This is a capital receipt because it involves obtaining funds through a loan, which is a form of borrowing that must be repaid.
B) Sale of 30% stake in a PSU to private companies: This is also a capital receipt as it involves selling an asset (equity in a Public Sector Undertaking) and receiving funds in return.
Capital receipts are typically non-recurring and involve transactions that affect the government's assets and liabilities.