UPSC 2025: Consider the following statements: I. Capital receipts create a liability or cause a reduction in the assets of the Government. II. Borrowings and disinvestment are capital receipts. III. Interest received on loans creates a liability of the Government. Which of the statements given above are correct?

Capital receipts are defined as those that either create a liability or lead to a reduction in government assets; borrowings raise liabilities while disinvestment reduces assets, so Statements I and II are correct. Interest received on loans is non-tax revenue and is classified as a revenue receipt—not a liability—so Statement III is incorrect. Hence only I and II are correct (option a). ([geeksforgeeks.org](https://www.geeksforgeeks.org/macroeconomics/capital-receipt-and-capital-expenditure-meaning-and-sources-of-capital-receipts/?utm_source=openai))