Identify which of the following is an example of non-debt capital receipts.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Recovery of loans.
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.
The other options are incorrect for the following reasons:
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Financial aid from an MNC: This is typically considered a revenue receipt (specifically, a grant), as it does not involve the creation of a liability or the reduction of a government asset.
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Borrowings from IMF: These are a form of loan and are classified as debt capital receipts because they create a liability for the government that must be repaid in the future.
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Dividend paid by State Bank of India: This is a form of regular income for the government from its shareholding. It is a part of revenue receipts, specifically non-tax revenue.