Consider the following statements: I. Capital receipts create a liability or cause a reduction in the assets of the Government. II. Borrowings and disinvestment are capital receipts. III. Interest received on loans creates a liability of the Government. Which of the statements given above are correct?

Options

1. I and II only
2. II and III only
3. I and III only
4. I, II and III

Correct Answer

I and II only

Explanation

Capital receipts either increase liabilities (borrowings) or reduce assets (disinvestment). Interest received on loans is a revenue receipt, not a liability.

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