Question

Statement 1: Foreign grants-in-aid receipts do not lead to any claim on the government.

Statement 2: Disposal of equity by the Public Sector Undertakings in the market may lead to a decrease in the assets of the government.

Options

• Statement 1 is true and Statement 2 is false.

• Statement 1 is false and Statement 2 is true.

• Both Statements 1 and 2 are true.

• Both Statements 1 and 2 are false.

Answer 1

Both Statements 1 and 2 are true.

Explanation:

• Foreign grants-in-aid are non-repayable funds from other countries or organizations that do not create financial obligations or claims on the government.
• Additionally, when the government disposes of equity in public sector undertakings by selling shares in the market, it reduces its ownership, leading to a decline in the value of its assets.