Which of the following sources of receipts increases the liabilities…

The correct answer is Option 4: Borrowings from public

Liabilities of the government increase when it takes loans or borrows money, as it creates an obligation to repay in the future. Let us analyze each option:

1. Indirect taxes – Incorrect

   • Taxes collected by the government (such as GST) are revenue receipts, not borrowings, and do not create any liability.

2. Recovery of loan from Punjab government – Incorrect

   • When the government recovers a loan, it receives money back, reducing assets but not creating any new liability.

3. Dividends received from the shares of SBI – Incorrect

   • Dividends are earnings from investments, which increase government revenue but do not increase liabilities.

4. Borrowings from public – Correct

   • When the government borrows from the public (through bonds or loans), it must repay the borrowed amount with interest, increasing its liabilities.