Economics · Public Finance and Budget
Which statement correctly differentiates between Revenue Receipts and Capital Receipts in the context of the Government of India's budget?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The distinction is purely based on the source: receipts originating from the Central Government are Revenue, and those from State Governments are Capital.
- 2Capital Receipts include market borrowings and disinvestment proceeds as they increase liabilities or decrease assets; Revenue Receipts include taxes and non-tax revenue and have no such impact.✓
- 3Revenue Receipts are always linked to Plan Expenditure for infrastructure, while Capital Receipts are used for day-to-day administrative expenses.
- 4Revenue Receipts create a liability or reduce assets for the government; conversely, Capital Receipts are recurring and do not impact the asset/liability position.
Correct answer
Capital Receipts include market borrowings and disinvestment proceeds as they increase liabilities or decrease assets; Revenue Receipts include taxes and non-tax revenue and have no such impact.
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