Miscellaneous Capital Receipts (MCRs)
Meaning
Miscellaneous Capital Receipts (MCRs) are non-recurring, non-debt capital inflows to the government.
They arise from sources other than regular operations and do not create future repayment liabilities.
In the Union Budget, MCRs form a major part of Non-Debt Capital Receipts (NDCRs).
Shift in budget terminology
The term “disinvestment” is no longer explicitly used in Budget documents.
Instead, proceeds are shown under Miscellaneous Capital Receipts (MCRs).
In Budget documents over the years, the word ‘disinvestment’ was used for the first time in the full Budget of 1991-92
Position in government accounts
Capital Receipts are classified into:
Debt Capital Receipts – borrowings, loans raised
Non-Debt Capital Receipts – include:
Miscellaneous Capital Receipts
Recovery of loans and advances
MCRs help in financing capital expenditure without increasing fiscal deficit through borrowing.
Key characteristics
Non-recurring: Not received every year.
Non-debt: No obligation to repay.
Asset-based: Generated by sale or monetisation of assets.
One-time inflows: Unlike tax revenue or fees.
Major components of MCRs
1. Disinvestment proceeds
Sale of government equity in:
Central Public Sector Enterprises (CPSEs)
Public Sector Undertakings (PSUs)
Includes:
Strategic disinvestment
Minority stake sales
Largest and most important component of MCRs in India.
2. Sale of assets
Sale of:
Land and buildings
Machinery and equipment
Patents, trademarks, goodwill
Other non-current assets
Often linked with asset monetisation programmes.
3. Insurance claims (extraordinary)
Large, exceptional claims received:
Fire damage compensation
Natural disaster-related claims
Not routine revenue receipts.
What MCRs do NOT include
Tax revenue
Non-tax revenue (fees, dividends, interest)
Borrowings or loans
Grants received
Importance in fiscal management
Reduce dependence on borrowing.
Support capital expenditure without increasing public debt.
Help manage fiscal deficit targets.
Reflect government’s asset management and disinvestment strategy.
Limitations
One-time and uncertain in nature.
Over-reliance may:
Create fiscal stress in future years.
Mask underlying revenue weaknesses.
Disinvestment receipts depend on market conditions.
Comparision
Component | MCRs | Revenue Receipts |
Nature | Capital | Revenue |
Recurrence | Non-recurring | Recurring |
Debt creation | No | No |
Examples | Disinvestment, asset sale | Taxes, fees |
Miscellaneous Capital Receipts are non-recurring, non-debt capital inflows, mainly from disinvestment and asset sales, used to finance long-term expenditure without increasing public debt.
Prelims Practice MCQs
Q. With reference to Miscellaneous Capital Receipts (MCRs) in the Union Budget, consider the following statements:
They are non-debt capital receipts.
They include proceeds from disinvestment and asset monetisation.
They form part of revenue receipts of the government.
Which of the statements given above are correct?
A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3
Correct answer: A
Explanation:
MCRs are non-debt capital receipts and include stake sales and asset monetisation. They are not revenue receipts.