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2MainSourcesof
GovernmentRevenuein
India
bySanketSumanGovernmentRevenue

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Thefollowingpointshighlightthetwomain
sourcesofgovernmentrevenueinIndia.

A.TaxRevenue:
UnionExciseDuties:
Theyare,presently,byfartheleadingsourceofrevenue
fortheCentralGovernmentandareleviedoncommo

ditiesproducedwithinthecountry,butexclu
dingthose
commoditiesonwhichStateexciseislevied(viz.,
liquorsandnarcoticdrugs).
Themostimportantcommoditiesfromtherevenue
pointofviewaresugar,cotton,millcloth,tobacco,
motorspirit,matchesandcement.
Customs:
Customsdutiesincludebothimportandexportduties.
Thesearethesecondmostimportantsourceofrevenue
fortheCentralGovernment.
IncomeTax:
Incometaxisatpresentanotherimportantsourceof
revenuefortheCentralGovernment.Itisleviedonthe

incomesofindividuals,Hinduundividedfamiliesand
unregisteredfirms.
CorporationTax:
Theincometaxonthenetprofitsofjointstock
companiesiscalledcorporationtax.

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WealthTax:
Itisanannualtaxonthenetwealthofindividualsand
Hinduundividedfamilies.Itisaprogressivetax.
GiftTax:
Itisataxongiftsofpropertybyanindividualinhis
lifetimetofuturesucce
ssors.
CapitalGainsTax:
Itisapplicabletocapitalgainsresultingfromthesale,
exchangeortransferofcapitalassets.
HotelExpenditureTax:
Recently,anewtaxhasbeenleviedonthosewho
patronisehighclasshotels.
TaxonForeignTravel:
Anothernewtaxleviedonforeigntravelforconserving
foreignexchangeaswellastoraiserevenue.

B.NonTaxRevenue:
InterestReceipts:
ThislargestnontaxsourceofCentralGovernments
revenuereceiptsistheinterestitearnsmainlyonthe
loansithasadvancedtoStateGovernments,tofinancial

andindustrialenterprisesinthepublicsector.
SurplusProfitsoftheReserveBankofIndia
(RBI):
ThesurplusprofitsoftheRBIisalsoapartofthe
revenuesoftheCentralGovernment.Inrecentyears,
thesehavebeenquitesubstantialbecauseofthelarge
borro
wingbytheGovernmentfromtheRBIagainst
TreasuryBillsforfinancingtheFiveYearPlans.
Currency,CoinageandMint:
TheGovern
mentalsoderivesincomefromrunningthe
CurrencyNotePrintingPresses.Moreover,profitsare
madefromthecirculationofcoinsthisprofitbeing
thedifferencebetweenthefacevalueofthecoinsand
theirmanu
facturingcost.
Railways:
TherailwaysinIndiaareownedandrunbythe
GovernmentofIndia.Accor
dingly,theypayafixed
dividendtogeneralrevenues,i.e.,totheCentral
Government,onthecapitalinvestedintherailways.
Besides,apartofthenetprofitsmadebytherailwaysis
alsopayabletotheCentralGovernment.
ProfitsofPublicEnterprises:
Publicenter
prisesownedbytheCentralGovernment,
e.g.,theSteelAuthorityofIndia(SAIL),Hindustan
MachineTools(HMT),BharatHeavyElectricalsLtd.
(BHEL),StateTradingCorporation(STC).Theprofits
ofsuchPublicSectorUnits(PSUs)areanothersourceof
revenuefortheGovernmentofIndia.
OtherNonTaxSourcesofRevenue:
ThemainsourceamongthemistheDepartmental
ReceiptsofthevariousministriesoftheCen
tral
Governmentbywayoffees,penalties,etc.

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