Which of the following is not a capital receipt of the Government of India ?
Dividend Income
The test for a capital receipt is simple: it either creates a liability for the government or reduces its assets. A receipt that does neither is a revenue receipt.
Dividend income received from public sector undertakings and the Reserve Bank is a return on investments the government already holds. It neither adds to government debt nor reduces the value of the underlying shareholding, so it is classified as a non-tax revenue receipt.
The other three all pass the test. Market borrowings raise fresh debt and so create a liability; recovery of loans previously advanced to states and others reduces a financial asset of the government; and disinvestment receipts arise from selling equity, which again reduces an asset.
Hence, the receipt that is not a capital receipt is Dividend Income.
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:
