Question

Which type of receipt may involve the sale of assets of the government?

Options

• Capital receipts

• Revenue receipts

• Neither revenue receipts nor capital receipts

• Both revenue receipts and capital receipts

Answer 1

Revenue receipts never involve the sale of assets, whereas capital receipts may involve asset sales — for example, disinvestment proceeds reduce the government's assets. Capital receipts may alternatively create liabilities, as with borrowing.