Indian History

Capital Receipts

The revenue generated by the government which is intended to be used to create new assets in various fields of the economy, is called Capital Receipts. This revenue is generated to meet the expenses required for the development of agriculture, industries, irrigation, electricity, basic amenities etc.
The government generates the capital revenue mainly through loans from internal and external sources. The loan obtained from citizens of the country, banks, financial institutions and industries is called internal debt. The loan obtained from foreign governments, foreign financial institutions and international financial institutions is called foreign debt.
Apart from taking loans, the government generates capital revenue through other sources too. It withdraws its investment in public industries. This is called disinvestment. From time to time, the state governments repay the loans and financial help they have taken from the central government. The money obtained through disinvestment and repayment of loans is called Non-debt capital receipts.
In this manner, the central government generates revenue from various sources. Utilising that revenue, it attempts to provide funds for administration and development in different areas of the economy.
NEXT