Question
How are capital receipts different from revenue receipts? Discuss briefly.
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Basis
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Capital Receipts
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Revenue Receipts
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Effect on government assets
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Capital receipts refer to those receipts of the government, which cause a reduction in the government assets.
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Revenue receipts are those receipts of the government which does not cause any reduction in the assets of the government.
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Effect on government liability
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Capital receipts refer to those receipts of the government, which create a liability for the government.
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Revenue receipts those receipts of the givernment which does not create any liability for the government.
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Examples
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These receipts comprisesn of recovery of loans, borrowings of governments and other liabilities of government.
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These receipts comprises of tax and non-tax receipts, duties and fines, interest and dividends receipts on government investments and assets.
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S. No.
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$(₹$ in lakhs$)$
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| $(i)$ |
Value of output.
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$200$ |
| $(ii)$ |
Net value added at factor cost.
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$80$ |
| $(iii)$ |
Sales tax.
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$15$ |
| $(iv)$ |
Subsidy.
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$5$ |
| $(v)$ |
Depreciation.
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$20$ |