Question

Identify the following as revenue receipts and capital receipts. Give reasons.
(i) Loans recovered from Public sector enterprises.
(ii) License and court fees received by the Government in the year 2014-15.
(iii) Loan taken from USA for the infrastructural developments.
(iv) Sale of shares held by Government in a PSU.
(v) Financial help from Microsoft for the victims of flood affected areas.
(vi) Amount borrowed from Japan for construction of Metro.
(vii) Dividend received by Government from a company.
(viii) Funds raised from public in the form of National Saving Certificates.
(ix) Sale of 40% shares of a public sector undertaking to a private enterprise.
(x) Profits of LIC, a public enterprise.

Answer 1

(i) It is a capital receipt as it reduces assets of the government.
(ii) It is revenue receipt as it neither creates any liability nor reduces any asset of the government.
(iii) It is a capital receipt as it creates liability for the government.
(iv) It is a capital receipt as it reduces assets of the government.
(v) It is revenue receipt as it neither creates any liability nor reduces any asset of the government.
(vi) It is a capital receipt as it creates liability for the government.
(vii) It is revenue receipt as it neither creates any liability nor reduces any asset of the government.
(viii) It is a capital receipt as it creates liability for the government.
(ix) It is a capital receipt as it reduces assets of the government.
(x) It is revenue receipt as it neither creates any liability nor reduces any asset of the government.