Question

External Assistance as a capital receipt refers to:

Options

• Loans received from foreign governments/international organisations, creating a liability

• Grants received from individuals for specific purposes

• Deposits of a special nature mobilised domestically

• Sale of the government's stake in Public Sector Enterprises

Answer 1

External assistance refers to loans received from foreign governments and international organisations. Such receipts create a liability for the government, which is why they are classified as capital receipts.