alleryStart learning →Revenue receipts are described as non-redeemable because they
Aare collected only from direct taxes
Bare received from foreign lenders
Care repaid within one financial year
Ddo not create a claim on the government
Answer & Solution
Correct answer: D. do not create a claim on the government
1. A receipt is redeemable if the government must eventually return it.
2. Revenue receipts carry no such obligation.
3. They therefore **do not create a claim on the government**, which is why they are called non-redeemable.
4. Borrowings do create a claim, and that is precisely why they are capital receipts instead.
_Source: syllabus Introductory Macroeconomics, Ch 5 "Government Budget and the Economy", section 5.1.2 Classification of Receipts_
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