UPSC CSE PRELIMS 2025 ALL ECONOMY PYQs

UPSC CSE PRELIMS 2025 ALL ECONOMY PYQs

UPSC CSE 2025 Prelims  All ECONOMY Questions Q1. 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? a) I and II only b) II and III only c) I and III only d) I, II and III Correct Answer: a) I and II only Explanation: Statement I is correct. Capital receipts are government receipts that either create a liability (e.g., borrowings, loans) or reduce an asset (e.g., disinvestment, which is selling shares in a PSU). Statement II is correct. Borrowings (a liability) and disinvestment (a reduction of assets) are both classic examples of capital receipts. Statement III is incorrect. Interest received on loans given by the government is an income and is classified as a Revenue Receipt (specifically, a non-tax revenue receipt). It does not create a liability; i…