Three of the following are part of the non-tax revenue of the central government. Which one is the odd one out?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Recovery of loans given by the central government
Recovery of loans is the odd one out. Getting back a loan reduces the government’s financial assets, so it is a non-debt creating capital receipt.
Fees for services, interest on loans given and dividends and profits on government investments are regular income. They create no liability and reduce no asset, so they are non-tax revenue.
NCERT (2026-27): “5.1.2 Classification of Receipts … Non-tax revenue of the central government mainly consists of interest receipts on account of loans by the central government, dividends and profits on investments made by the government, fees and other receipts for services rendered by the government. …” “5.2.1 Measures of Government Deficit … Non-debt creating capital receipts are those receipts which are not borrowings and, therefore, do not give rise to debt. Examples are recovery of loans and the proceeds from the sale of PSUs. …” |