WBCS Preliminary Examination 2023 — General Studies · Question 177 of 200

Answer: (D) Grants

A capital receipt either creates a liability or reduces an asset. Provident fund deposits create a liability for the government, while recovery of loans and disinvestment of PSU shares reduce its assets; all three are capital receipts (the last two being non-debt capital receipts). Grants received create no liability and reduce no asset, so they are revenue receipts, classed with non-tax revenue such as interest, dividends and fees. Related definitions: fiscal deficit = total expenditure − (revenue receipts + non-debt capital receipts); primary deficit = fiscal deficit − interest payments.