In light of fast moving environment we must know Income and Expenditure by Government in India.
Income of Government in India
- There are mainly two types of collections done by government, Income tax and Goods and Services Tax.
- The major portion comes from tax levied on peoples’ incomes. It includes mainly income tax and tax from National Insurance Contributors.
- More income leads to increase in taxes so, it will leads to rise in government revenue.
- Other taxes include council or house tax, business tax, corporation tax and rent on Government-owned buildings.
- Tax collected over a period of 30 years is stable because it is dependable on richest income taxpayers.
- Implementation of Goods and Services Tax has also helped a lot in creating revenue for the government. The Goods and Services Tax has declining revenue, so government is planning to introduce several key features to increase collection. The above point is inclusive of increasing the 5% tax slab to 6% and raising tax on cigarettes and aerated drinks.
- With an increase in population there is increase in income leading to increase in taxes levied thereby increasing Government revenue.
- Different taxes have different impact on population of country.
- House Tax: If tax is levied on houses, there is an increase in its price which decreases its demand in turn fall in government’s revenue.
- Business Tax: If tax is levied on business firms, it increases their cost of production, lead to decrease in supply and fall in government’s revenue.
- Custom duty: Taxes on imports.
- Excise duty: Taxes on goods manufactured and sold in India.
- Goods and Services Tax.
Expenditure by Government in India
- Some expenditure on transportation of goods from one country to another and very rare on building of bridges, roads etc.
- Subsidies to farmers and manufacturers in order to increase supply.
- Rural employment scheme is a scheme given by government for providing benefits to people in rural areas. They get necessities at a very lower price than the market price.
- Government also have to spend amount on healthcare, education and defense.
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