Q.Explain the sources of Public Revenue of the Government of India.

Government revenue comes from compulsory tax levies and a range of non-tax sources tied to its own activities.

Explain both categories with examples.

Public Revenue is all the income the government receives to finance its expenditure, divided into two categories:

1. Tax Revenue. A tax is a compulsory payment with no direct, proportional benefit in return, divided into:

• Direct Taxes — impact and incidence fall on the same person and cannot be shifted, e.g. Income Tax and Corporate Tax; generally progressive.
• Indirect Taxes — the burden can be shifted to another person (usually the final consumer), e.g. the Goods and Services Tax (GST, effective 1 July 2017, unifying most earlier indirect taxes under CGST/SGST/IGST with input tax credit) and customs duty; generally regressive but harder to evade.

2. Non-Tax Revenue, including: fees for specific services (registration, licence fees); fines and penalties for violating laws; profits/dividends of public sector undertakings and the RBI's annual surplus; grants and gifts from foreign governments/institutions; special assessment on property benefiting from a public improvement; escheat (property with no legal heir); and interest receipts on loans advanced by the government.

Tax revenue is the larger and more dominant source of government revenue, while non-tax revenue supplements it, particularly through PSU dividends and the RBI surplus.