li  inan e in ndia     18.5
     revenue                                                            the country (i.e., external lending). It
                                                                        means this income might be in both
     Every form of money generation in the nature
                                                                        domestic and foreign currencies.
     of income, earnings are revenue for a firm or a
     government which do not increase financial                   (iii) Fiscal services also generate incomes for
     liabilities of the government, i.e., the tax incomes,              the government, i.e., currency printing,
     non-tax incomes along with foreign grants.                         stamp printing, coinage and medals
                                                                        minting, etc.
     non-revenue                                                  (iv)  General Services also earn money for the
     Every form of money generation which is not                        government as the power distribution,
     income or earnings for a firm or a government                      irrigation,        banking,       insurance,
     (i.e., money raised via borrowings) is considered                  community services, etc.
     a non-revenue source if they increase financial               (v)  Fees, Penalties and Fines received by the
     liablities.                                                        government.
                                                                  (vi)  Grants which the governments receives—
     receiPts                                                           it is always external in the case of the
     Every receiving or accrual of money to a                           Central Government and internal in the
     government by revenue and non-revenue sources                      case of state governments.
     is a receipt. Their sum is called total receipts.
     It includes all incomes as well as non-income
                                                              revenue exPenDiture
     accruals of a government.                                All expenditures incurred by the government are
                                                              either of revenue kind or current kind or compulsive
     revenue receiPts                                         kind. The basic identity of such expenditures is that
     Revenue receipts of a government are of two              they are of consumptive kind and do not involve
     kinds—Tax Revenue Receipts and Non-tax                   creation of productive assets. They are either used
     Revenue Receipts—consisting of the following             in running of a productive process or running a
     income receipts in India:                                government. A broad category of things that fall
                                                              under such expenditures in India are:
     tAx revenue receiPts                                           (i) Interest payment by the government on
     This includes all money earned by the government                   the internal and external loans;
     via the different taxes the government collects, i.e.,        (ii) Salaries, Pension and Provident Fund
     all direct and indirect tax collections.                           paid by the government to government
     non-tAx revenue receiPts                                     (iii) Subsidies forwarded to all sectors by the
     This includes all money earned by the government                   government;
     from sources other then taxes. In India they are:            (iv) Defence expenditures by the government;
           (i) Profits and dividends which the                     (v) Postal Deficits of the government;
               government gets from its public sector             (vi) Law and order expenditures (i.e., police
               undertakings (PSUs).                                     & paramilitary);
          (ii) Interests recieved by the government out          (vii) Expenditures on social services (includes
               of all loans forwarded by it, be it inside the           all social sector expenditures as education,
               country (i.e., internal lending) or outside              health care, social security, poverty