Question : The government's borrowings from the public are known as ____________.
Option 1: Revenue receipts
Option 2: Capital receipts
Option 3: Revenue expenditure
Option 4: Capital expenditure
Correct Answer: Capital receipts
Solution : The correct answer is (B) Capital receipts.
Capital receipts refer to the funds raised by the government through borrowing, disinvestment of public assets, or other forms of capital inflows. When the government borrows money from the public, it issues bonds, treasury bills, or other debt instruments to raise capital. This borrowing increases the government's liabilities and leads to the accumulation of public debt.
Revenue receipts, on the other hand, refer to the government's regular income sources, such as taxes, non-tax revenues, grants, and other revenue inflows.
Revenue expenditure refers to the government's spending on day-to-day expenses and current obligations, while capital expenditure refers to the government's spending on long-term investments and assets.
