Which of the following is the non-debt creating capital receipt?
I. Recovery of loans
II. Proceeds from the sale of public sector unit
Show answer & explanation
Correct answer: C
Explanation
Correct Answer:
Option 3: Both I and II
Explanation:
Non-debt-creating capital receipts are those that do not impose a future burden of debt repayment on the government. This includes both the recovery of loans and the income generated from the sale of public sector undertakings (Disinvestment). These serve as significant revenue sources for the government and play a helpful role in maintaining fiscal stability.
Additional Facts:
Option 1: Only I is incomplete.
Option 2: Only II is incomplete.
Option 3: Correct Answer.
Option 4: Incorrect.
Potential Questions for Upcoming Exams:
Question: What are revenue receipts?
Answer: Government income
Question: What is disinvestment?
Answer: Sale of PSUs
Question: What are capital receipts?
Answer: Income derived from assets
Question: Who presents the budget?
Answer: The Finance Minister