SSC CGL 2024 Tier-I · 25 September 2024, Shift 2 · General Awareness · Question 3 of 99

Text as printed on a candidate's response sheet for this shift; answer per SSC's tentative key as marked on that sheet. Solution last reviewed 10 September 2026.

Where this paper and its answers come from

SSC does not publish CGL question papers or a public answer key. The questions and options here are reproduced as printed on a candidate's own response sheet for this shift — the Commission's text, unchanged. Each answer is SSC's tentative key as marked on that sheet; SSC allowed challenges to it and never publishes a final key. The solutions are written by UnlockIAS.

Which of the following is an example of capital receipts?

(a)Grants-in-aid from other governments
(b)Interest on government bonds
(c)Revenue from the sale of government assets
(d)Taxes on income

Answer

Why

Correct — C. A receipt is capital if it does one of two things: creates a liability for the government, or reduces its assets.

Selling a government asset does the second. Cash comes in, the asset leaves the government's books, and the transaction is not repeatable next year from the same asset.

Apply the same two-part test to the rest and none of them changes an asset or creates a liability, which is why the sale of government assets in option (c) is the capital receipt here.

Why the others are wrong

(a)
Grants-in-aid from other governments — Grants-in-aid received from another government are revenue receipts. Nothing has to be repaid, so no liability is created, and no asset leaves the books.
(b)
Interest on government bonds — Interest on government bonds is a revenue item on either reading — interest received is non-tax revenue, interest paid is revenue expenditure. Neither touches the asset or liability stock.
(d)
Taxes on income — Taxes on income are the textbook revenue receipt. Tax revenue creates no repayment obligation and reduces no asset, so it cannot be a capital receipt however large the collection.

Concept

The government budget splits every receipt into two accounts, and the split is decided by a definition, not by size.

Revenue receipts neither create a liability nor reduce an asset — tax revenue, interest and dividend receipts, fees, fines and grants received.

Capital receipts do one or the other. Borrowing creates a liability. Recovering a loan the government had given, or selling a public asset, reduces an asset. Disinvestment proceeds belong to this second group.

Candidates lose this one by classifying on instinct — big and one-off feels capital, small and regular feels revenue.

The test is mechanical. Ask whether the government now owes something it did not owe, or owns something less than it owned. If neither, the receipt is revenue.

Key facts

A capital receipt either creates a liability for the government or reduces its assets.
Borrowings, recovery of loans granted and disinvestment proceeds are the standard capital receipts.
Tax revenue, interest receipts, dividends, fees and grants received are revenue receipts.
The fiscal deficit is financed mainly by borrowing, which is itself a capital receipt.

Study next

Revenue deficit, fiscal deficit and primary deficit, and what each one measuresCapital expenditure against revenue expenditure in the Union BudgetDisinvestment as a route to non-debt capital receipts

Common traps

Classifying by the size of the sum instead of applying the liability-or-asset test.
Calling grants-in-aid a capital receipt because they are not tax revenue.

Budget questions come either as a definition to apply, as here, or as a number to recall from a particular year's budget.

The definition of a deficit budget is asked on 26 Sep 2024, 12:30 at General Awareness Q.6, and the disinvestment target for 2023-24 is asked as a figure on 19 Sep 2024, 12:30 at General Awareness Q.2.

Related PYQs

No directly related past PYQ was found.