Unveiling the fiscal blueprint: Analysing India’s economic strategy and revenue sources

The Union budget to be presented by the Union Finance Minister, Nirmala Sitharaman, is redolent with an amalgamation of infrastructural and long-term reform-intensive measures. As one waits for the same contours, it would be pertinent to take a look at the sources of revenue available to the government and trends in expenditure.

It is interesting to note that the single largest share of the government's income, at 28 per cent, is from borrowings and other liabilities. Income tax and GST each contribute 18 per cent, while corporation tax accounts for 17 per cent. Non-tax receipts, including rent and fines account for 7 per cent of the income. Union excise duties contribute 5 per cent and customs 4 per cent, with non-debt capital receipts at 1 per cent.

The break-up on the expenditure side is: 20 per cent for interest payments and the equal amount is distributed among states as taxes and duties. Central sector schemes gobble up 16 per cent of the total expenditure. Other important allocations go toward other expenditures at 9 per cent, defence and centrally-sponsored schemes at 8 per cent each, and subsidies at 6 per cent.

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Minister Sitharaman expressed that the Indian economy has undergone a considerable transformation for good over the last decade. This would, therefore, be the principal role that this coming budget would play in continuing the impetus and acting as a backbone for further improvement of the economy. The concentration on infrastructure and long-term reforms is thus envisioned to lay a platform for continuous growth in the Indian economy.