Central Government: Revenues and Expenditures (With Statistics)

In this article we will discuss about the Central Government of India:- 1. Revenues of the Central Government 2. Expenditure of the Central Government.

Revenues of the Central Government:

The budget of the Central Government is constituted by:

(a) Revenue budget, i.e., the estimates of receipts and disbursements on Revenue Account and

(b) Capital budget relating to receipts and disbursements on Capital Account.

The revenue receipts of the Government constitute the tax revenue and non-tax revenue.

The Tax revenue of the Government includes:

(a) Taxes on income,

(b) Taxes on property and Capital transactions and

(c) Taxes on commodities and services.

The Non-tax revenue of the Government includes:

(a) Revenue from fees and other services,

(b) Interest receipts and

(c) Dividends and profits of public enterprises.

Table 17.1 shows the revenue of the Central Government in Revenue Account:

Table 17.1 shows that the total revenue of the Central Government has been increasing at a faster rate due to imposition of higher rates of taxes, additional taxes and also due to inflationary impact. Thus the total revenue of the Central Government rose from a mere Rs 406 crore in 1950-51 to 12,419 crore in 1980-81 and then to Rs 2,01,306 crore in 2001-02.

In 2014-2015 budget, the total revenue is estimated at Rs 11,89,763 crore. The share of tax revenue in total revenue declined from 88 per cent in 1950-51 to 73 per cent in 1980-81 and stood at about 82.1 per cent in 2014-15, Moreover, the tax revenue of the Central Government is raised through taxes on income and commodity taxes (Sales tax, excise duties etc.).

Taxes on income and property raised by the Central Government rose from Rs 130 crore in 1950-51 to Rs 1,810 crore in 1980-81 and then to Rs 7,36,221 crore in 2014-15 (BE). Again the total revenue of commodity and service taxes also rose from mere Rs 230 crore in 1950-51 to Rs 7,440 crore in 1980-81 and then to Rs 6,24,902 crore in 2014-15 (BE).

Total tax revenue also increased from Rs 357 crore in 1950-51 to Rs 42,978 crore in 1990-91 and then to Rs 9,77,258 crore in 2014-15 (BE). Again the non-tax revenue of the Central Government also rose from Rs 40 crore in 1950-51 to Rs 12,830 crore in 1980-81 and then to Rs 32578 crore in 1996-97 and finally to Rs 2,12,505 crore in 2014-2015 (BE).

Thus the revenue receipts of the Central Government have maintained an increasing trend and the tax revenue dominated all along. Again commodity and services taxes contributed about 46.8 per cent and the taxes on income and property contributed about 52.4 per cent of the total tax revenue.

Expenditure of the Central Government:

The expenditure of the Central government is broadly classified into:

(a) Revenue expenditure and

(b) Capital expenditure.

Table 17.2 reveals the progress of expenditure of the Central Government.

Table 17.2 reveals that the total expenditure of the Central Government rose from a mere Rs 530 crore in 1950-51 to Rs 1,22,618 crore in 1992-93, and then it rose to Rs 1,90,336 crore (RE) in 1996-97 and then it is estimated at Rs 17,94,892 crore in 2014-15 (BE).

Again since 1987-88, a new classification of public expenditure is adopted. Accordingly, the expenditure of the Central Government is broadly classified into non-plan expenditure and plan expenditure. In 2014- 2015, the actual estimates of non-plan expenditure and plan expenditure was to the tune of Rs 12,19,892 crore and Rs 5,75,000 crore respectively.

Again the budget estimates of non-plan and plan expenditure in 2015-16 budget is fixed at Rs 13,12,200 crore and Rs 4,65,277 crore. Thus we have seen that the revenue expenditure of the Government is increasing at a faster rate as it rose from a mere Rs 350 crore in 1950-51 to Rs 15,68,112 crore in 2014-15 (BE).

This is mainly due to increase in the volume of expenditure under the heads like defence, general administration, maintenance of democratic institutions and social services.

Again non-plan expenditure also increased considerably due to increase in expenditure on interest payment and in 2014-15, the expenditure on interest payment stood at Rs 4,27,011 crore. Again, the capital expenditure increased from Rs 180 crore in 1950-51 to Rs 2,26,780 crore in 2014-2015 (B.E.).