- Taxes and duties levied by the government form the biggest source of its income or receipts.
- It is interesting to see that in the total receipts of the government for the FY 2020-21 the share of Corporate Taxes is 18% followed by GST and other taxes with a share of 18%.
- In the total receipt of the central government the share of income tax is 17% while the share of union excise duty is just 7% and customs duty only 4%.
- Non tax receipts constitute about 10% of the total receipts of the government whereas non-debt capital receipts about 6%.
- Market borrowing and other liabilities still remain to be the largest source of central government’s receipts constituting 20% of the total receipt.
- Interest Payments constitute 18% of total expenditure of the central government, followed by central sector schemes at 13%, centrally sponsored government schemes at 9%, defense at 8% and subsidies and pensions both at 6%. Other heads of expenditure had a share of 10 in total expenditure of the government.
- It is also interesting to see that the share of taxes transferred to states by centre constituted about 20% of the total expenditure of the central government and Finance Commission and other transfers claiming 10% of the total expenditure of the central government.
What is included in non-debt capital receipts?
In the budget documents, the Union government usually lists non-debt capital receipts in two broad categories – recovery of loans and other receipts. Other receipts basically mean disinvestment proceeds from the sale of the government’s share in public sector companies. Over the years, this has become a major source of the Union government’s non-debt capital receipts.
At a detailed level, the government divides non debt capital receipts into more than a dozen sub-heads.
Types of Non Debt Capital Receipts
Broadly, there are two kinds of non debt capital receipts:
- Recoveries of loans and advances and
- Miscellaneous capital receipts
Recoveries of loans and advances:
This kind of non debt capital receipts includes:
- Recovery of loans and advances from state governments and union territories with legislature
- Recovery of loans given to foreign governments
- Recovery of loans and advances from PSUs and other autonomous bodies
However, recovery of loans and advances account for only a small fraction of total non debt capital receipts
Miscellaneous Capital Receipt
This includes proceeds from disinvestment in public sector undertakings. The government further classifies disinvestment proceeds into:
- Disinvestment receipts
- Strategic disinvestment
- Listing of PSUs in stock markets and
- Issue of bonus shares
Over a period, disinvestment has become the main source of the Union government’s non debt capital receipts.