Revenue Receipts of the Government

Revenue Receipts of the Government

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Both revenue receipts and revenue spending are included in the revenue budget. Revenue receipts are defined as those receipts that neither increase the government's liabilities nor decrease its assets. They are routine, short-term (often up to a year), and recurring in nature, and the government receives them as part of routine operations. According to their source, the government's revenue receipts are split into two categories.

a) Tax Receipts - Direct tax and indirect tax are both included in tax receipts. Income tax, corporate tax, gift tax, capital gains tax, and others are a few of the significant direct taxes levied by the Indian government. The Government of India imposes a number of significant indirect taxes, including the Goods and Service Tax (GST), customs duties, and Securities Transaction Tax.

b) Non-Tax Receipts - The government receives interest on loans it has given to state governments, foreign governments, businesses, etc. received dividends from businesses, The government is paid for a variety of services it provides, such as tolls it collects on highways constructed by central government agencies, tuition it charges students to attend its schools, fines the Supreme Court imposes on individuals or institutions, etc. Revenue receipts include both tax and non-tax receipts. Taxes must be paid on income gained during the course of a year, and they must be paid annually unless the government abolishes them. The money the government receives in the form of taxes is not a debt or liability for the government because tax receipts are short-term (up to one year) and recurrent in nature. In the case of non-Tax Receipts, the same applies.

Revenue Expenditure

The portion of government spending that does not result in the production of assets is known as revenue expenditure. Examples of revenue expenditures in this area include paying salaries, wages, pensions, subsidies, and interest. Also keep in mind that the government incurs income expenses to meet its operating demands. Let's examine the revenue and spending categories now.

• The pension and salaries that the government pays

• The cost incurred by the government for maintaining its offices and buildings;

• The subsidy granted by the government on foods, fertilisers, etc.

• The grant that the government of India provides to the state government or foreign government.

Every month, the government must pay money for the wages of its employees, subsidies, maintenance, etc. Since it receives no return on these expenses, they are ongoing and do not result in the creation of assets for the government. They fall under revenue expenditure because of this.