Explanation:

Borrowings are the funds raised by government to meet excess expenditure.

Governments borrow funds from:

(i) Open Market (Public);

(ii) Reserve Bank of India (RBI);

(iii) Foreign governments (like loans from USA, England etc.);

(iv) International institutions (like World Bank, International Monetary Fund).

Borrowings are capital receipts as they create a liability for the government.

Recovery of Loans:

Government grants various loans to state governments or union territories. Recovery of such loans is a capital receipt as it reduces the assets of the government.

Other Receipts:

These include:

(a) Disinvestment:

Disinvestment refers to the act of selling a part or the whole of shares of selected public sector undertakings (PSU) held by the government. They are termed as capital receipts as they reduce the assets of the government. Government holds ownership in various PSU’s in the form of equity shares. When the government sells a part or whole of its shares, it leads to transfer of ownership of PSU’s to the private enterprises.

(b) Small Savings:

Small savings refer to funds raised from the public in the form of Post Office deposits, National Saving Certificates, Kisan Vikas Patras etc. They are treated as capital receipts as they lead to an increase in liability.