CBSE 2019 Class 12 Economics Delhi Set 1

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Question : 9
Total: 19
How are capital receipts different from revenue receipts? Discuss briefly.
Solution:  
 Basis  Capital Receipt  Revenues Receipt
 (i) Meaning  These are those receipt of government which either lead to increase in its liabilities or reduction in its assets.  Revenue receipt neither create any liability nor reduce any asset of the government.
 (ii) Nature  They are irregular and non-recurring in nature.  These receipts are regular and recurring in nature.
 (iii) Obligation  There can be future obligation to return the amount along with interest in certain capital receipts like borrowing.  There is no future obligation to return the amount received.
 (iv) Examples  Borrowings, receipt from disinvestment etc.  Income tax, Profit of PSU, dividends, fee and fine etc.
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