Understanding Capital Receipts vs. Revenue Receipts
A capital receipt is a receipt that is not generated from the normal day-to-day trading activities of a business or government. These receipts are typically non-recurring and affect the capital or asset base. Examples include borrowings, sale of fixed assets, or government loans.
A revenue receipt, conversely, arises from regular business operations and is recurring. Examples include sales revenue, taxes, fees, and interest income.
Analyzing the Options
- Income Tax collected: This is a primary source of revenue for the government, collected regularly from taxpayers. It is a revenue receipt.
- Dividend from PSUs: Dividends received by the government from its investments in Public Sector Undertakings represent income generated from those investments. This is typically treated as a revenue receipt.
- Loan taken from RBI: Borrowing funds, whether from the Reserve Bank of India (RBI) or other sources, increases liabilities and is not derived from operational activities. It affects the government's overall financial position and is considered a capital receipt.
- Sale proceeds of public services: Income generated from providing public services is the core function for many government entities. This represents earnings from regular operations and is a revenue receipt.
Conclusion
Based on the analysis, taking a loan increases the entity's liabilities and does not stem from regular operational income. Therefore, a Loan taken from RBI is the correct example of a capital receipt among the choices provided.
Similar Questions
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Important Questions from Economy
When goods are produced by exploiting natural resources, it is an activity associated with:
A system in which local farmers were allowed to cultivate temporarily within a plantation is known as:
Which goods from India dominated the international textile markets before the age of mechanized industries?
Which type of farming is practiced in areas of high population pressure on land?
The major economic attribute for comparing countries is their:
