Question

The receipts that either create liabilities or reduce assets of the government are called

• A. revenue receipts
• B. capital receipts
• C. public debt
• D. foreign remittance

Answer 1

The correct option is B capital receipts

Capital receipts either create liabilities or reduce assets of the government. Capital receipts can be in the form of disinvestment, where the government sells or liquidates public companies. It can also be in the form of recovery of loans given by the centre to the states. In both the cases, there is a reduction in the assets of the government.