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
employees;
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