Q.Read the following text carefully : The government has allocated ₹ 15.27 lakh crore for major sectors, ranging from defence to rural development to social welfare to commerce and so on. Government expenditure goes to paying states' share of taxes and duties. Around 19% is spent on interest payments and 16% on central sector schemes, with subsidies, pension and other payments contributing 19%. Government revenue is divided between borrowings and other liabilities, which account for massive 27% of the incoming cash, Income tax revenue of around 19% Goods and Services Taxes (GST) and other taxes of around 18%; Corporation taxes account for around 17%. The next highest provision on this list is ₹ 2.66 lakh crore for rural development. This will include expenditure on rural infrastructure project and increased outlay for the popular MGNREGA scheme. On the basis of given text and common understanding, answer the following questions :

1. The major sources of government revenue, based on the text, are borrowings and other liabilities (27% of incoming cash), income tax (19%), GST and other taxes (18%), and corporation tax (17%). These four together account for 81% of the government's revenue receipts.
2. The need to allocate funds among different sectors arises because the government has to fulfil multiple, often competing, objectives simultaneously. Defence spending ensures national security; rural development (including MGNREGA) addresses poverty and infrastructure gaps in rural areas; interest payments service past debt; subsidies and pensions provide social safety nets; and central sector schemes drive targeted national priorities. A balanced allocation prevents any single sector from being starved of resources, which would create bottlenecks in the economy. For example, neglecting rural infrastructure would hurt agricultural productivity and rural incomes, while underfunding defence could compromise sovereignty. The budget thus reflec …

(i) Major Sources of Government Revenue and Their Contributions

From the text, the government’s revenue is divided into four major sources, each contributing a specific percentage of the total incoming cash. These are:

• Borrowings and other liabilities — 27% of total revenue. This is the single largest source, meaning the government relies heavily on loans (from banks, the public, or international institutions) to finance its expenditure.
• Income tax — 19%. This is the tax levied directly on individuals’ earnings above a certain threshold.
• Goods and Services Tax (GST) and other taxes — 18%. GST is an indirect tax collected at each stage of production and sale of goods and services.
• Corporation tax — 17%. This is the tax on profits earned by companies.

So, in summary:

(ii) Need to Allocate Funds Among Different Sectors

The government’s budget is not just a list of numbers — it is a policy document that reflects the nation’s priorities. Allocating funds across sectors is necessary for several reasons:

1. Balanced regional and sectoral development.

Not all sectors grow at the same pace. Agriculture and rural areas often lag behind industry and services. By allocating ₹2.66 lakh crore to rural development (including MGNREGA and infrastructure), the government tries to reduce the rural-urban gap and ensure that growth reaches the poorest.

2. Meeting essential public goods and services.

Defence, law and order, and basic infrastructure (roads, electricity, water) are non-negotiable. The text mentions defence as a major sector — without it, national security is at risk. Similarly, social welfare spending (health, education, pensions) protects vulnerable groups.

3. Managing fiscal obligations. …