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UPSC PYQPrelims 2025

Civil Services Examination · Question 40

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?

  1. I and II only
  2. II and III only
  3. I and III only
  4. I, II and III
Show answer & explanation

Answer: (A) I and II only

Explanation

Capital receipts (I, II) are correctly described; interest received is a revenue receipt, not a liability-creating item, so III is wrong.