Q.Explain various sources of public revenue.

Public revenue comes from tax revenue (direct and indirect taxes) and non-tax revenue (fees, fines, special assessment, profits of public undertakings, grants and gifts).

Public revenue means the total income received by the government. Its sources are broadly classified into tax revenue and non-tax revenue.

A. Tax Revenue:

A tax is a compulsory payment made to the government without any direct return (quid pro quo) to the taxpayer.

1. Direct Taxes — Taxes whose burden falls on the same person who pays them and cannot be shifted, e.g. personal income tax, corporate tax, wealth-related taxes.
2. Indirect Taxes — Taxes on goods and services whose burden can be shifted to others, e.g. Goods and Services Tax (GST) and customs duties.

B. Non-Tax Revenue:

Income the government earns from sources other than taxes.

1. Fees — Payments for a specific service rendered by the government, e.g. court fees, licence fees, registration fees.
2. Fines and Penalties — Payments imposed on those who break laws; their main aim is to discourage wrongdoing rather than to earn income.
3. Special Assessment — A charge levied on property owners who gain from a specific public improvement, e.g. a betterment levy when a new road raises land value nearby. …