In general, a government grant received for a specific capital purpose is treated as capital income and added to the capital fund (in NPO) or credited to a specific reserve. Grants for revenue purposes are credited to the Income and Expenditure Account. The standard textbook default treatment for a general government grant in NPO accounting is capital income.
Note: The question is ambiguous as the nature of the grant is not stated; we have taken it as a general capital receipt as per the commonly tested treatment.