Consider the following statements: I. Capital receipts create a liability or cause a reduction in the assets of the Government. II. Borrowings and disinvestment are capital receipts. III. Interest received on loans creates a liability of the Government. Which of the statements given above are correct?

I. Correct. Capital receipts either create liabilities for the government (e.g., borrowings) or reduce assets (e.g., recovery/disinvestment of assets).
II. Correct. Borrowings and disinvestment are standard examples of capital receipts.
III. Incorrect. Interest received on loans is a revenue receipt, not a capital receipt, and it does not create a liability of the government.

Hence, statements I and II only are correct.