Non Debt Capital Receipts definition: Taxes and duties levied by the government form the biggest source of its income or receipts.
Non Debt Capital Receipts definition: Taxes and duties levied by the government form the biggest source of its income or receipts. The government spends this money on both operational and developmental needs. Usually, there are two main sources of the government’s income – revenue receipts and capital receipts. Note that both revenue as well as capital receipts can be divided into two sub-groups.
What do you mean by Non Debt Capital Receipts?
Revenue receipts comprise both tax and non-tax revenues while capital receipts consist of capital receipts and non-debt capital receipts. Non-debt capital receipts, also known as NDCR, account for just 3% of the central government’s total receipts.
Example of Capital Receipts
Note that non debt capital receipts (NDCR) of the union government include:
- Recoveries of loans and advances given to state governments, Union territories and foreign governments
- Disinvestment proceeds
- Money accrued to the Union government from listing of central government companies and issue of bonus shares
Nearly three-fourths of the central government’s receipts come from tax and non-tax revenues, while one-fourth comes from capital receipts that include non-debt capital receipts and borrowings.
Non Debt Capital Receipts: What is included?
In the budget documents, the Union government usually lists non-debt capital receipts in two broad categories – recovery of loans and other receipts. Other receipts basically mean disinvestment proceeds from the sale of the government’s share in public sector companies. Over the years, this has become a major source of the Union government’s non-debt capital receipts.
At a detailed level, the government divides non debt capital receipts into more than a dozen sub-heads.
Types of Non Debt Capital Receipts
Broadly, there are two kinds of non debt capital receipts:
- Recoveries of loans and advances and
- Miscellaneous capital receipts
Recoveries of loans and advances:
This kind of non debt capital receipts includes:
- Recovery of loans and advances from state governments and union territories with legislature
- Recovery of loans given to foreign governments
- Recovery of loans and advances from PSUs and other autonomous bodies
However, recovery of loans and advances account for only a small fraction of total non debt capital receipts
Miscellaneous Capital Receipt
This includes proceeds from disinvestment in public sector undertakings. The government further classifies disinvestment proceeds into:
- Disinvestment receipts
- Strategic disinvestment
- Listing of PSUs in stock markets and
- Issue of bonus shares
Over a period, disinvestment has become the main source of the Union government’s non debt capital receipts.