li inan e in ndia 18.7
The term was innovated by the Government of a government as the case had been with India.
of the time to show some rationale in its high The capital receipts in India include the following
revenue deficit by bringing the logic that all of capital kind of accruals to the government:
it were not like a typical revenue expenditure
(which are consumptive in nature) and some of (i) Loan Recovery
it were used to create ‘capital assets’ also (though This is one source of the capital receipts. The
they cannot be shown in the ‘capital’ heads of money the government had lent out in the past
expenditures). Though, the new Government at in India (states, UTs, PSUs, etc.) and abroad their
centre does not give the same significance to the capital comes back to the government when the
term, it has been releasing data related to it.
borrowers repay them as capital receipts. The
The Union Budget 2017-18 has committed interests which come to the government on such
to reduce the effective revenue deficit to 0.7 per cent loans are part of the revenue receipts.
in 2017-18 and 0.2 per cent in 2018-19 (it was
estimated to be 1.2 per cent for 2016-17). While (ii) Borrowings by the Government
the revenue deficits for 2017-18 and 2018-19 have
This includes all long-term loans raised by the
been set at 1.9 per cent and 1.4 per cent by the
budget. government inside the country (i.e., internal
borrowings) and outside the country (i.e., external
revenue buDget borrowings). Internal borrowings might include
the borrowings from the RBI, Indian banks,
The part of the Budget which deals with the income
financial institutions, etc. Similarly, external
and expenditure of revenue by the government.
borrowings might include the loans from the
This presents the annual financial statement
World Bank, the IMF, foreign banks, foreign
of the total revenue receipts and the total revenue
governments, foreign financial institutions, etc.
expenditure—if the balance emerges to be positive
it is a revenue surplus budget, and if it comes out (iii) Other Receipts by the Government
to be negative, it is a revenue deficit budget.
This includes many long-term capital accruals
cAPitAl buDget to the government through the Provident Fund
(PF), Postal Deposits, various small saving
The part of the Budget which deals with the
receipts and expenditures of the capital by the schemes (SSSs) and the government bonds sold
government. This shows the means by which the to the public (as Indira Vikas Patra, Kisan Vikas
capital is managed and the areas where capital is Patra, Market Stabilisation Bond, etc.). Such
spent. receipts are nothing but a kind of loan on which
the government needs to pay interests on their
cAPitAl receiPts maturities. But they play a role in capital raising
All non-revenue reciepts of a government are process by the government.
known as capital receipts. Such receipts are for
investment purposes and supposed to be spent
on plan-development by a government. But the All the areas which get capital from the government
receipts might need their diversion to meet other are part of the capital expenditure. It includes so
needs to take care of the rising revenue expenditure many heads in India —