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Question : 19
Total: 60
Read the following statements carefully and choose the correct alternative.
Statement 1: Recovery of loans is a non-debt creating capital receipt.
Statement 2: Recovery of loans cause a reduction in assets of the government.
Statement 1: Recovery of loans is a non-debt creating capital receipt.
Statement 2: Recovery of loans cause a reduction in assets of the government.
Solution:
(c) Both the statements are true
Explanation:
Non debt creating capital receipts are those receipts which are not borrowing and hence do not give rise to loans. Government grants loans to state or union government. Recovery of these loan capital receipt as it reduces the assets of government.
Explanation:
Non debt creating capital receipts are those receipts which are not borrowing and hence do not give rise to loans. Government grants loans to state or union government. Recovery of these loan capital receipt as it reduces the assets of government.
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