UNIT 8: GOVERNMENT BUDGET: 6 MKS Esra Pec 1 in cor i 7 Bstisones T J Now=Tax Recovery OTner Pecevrs Revenue ing OF 1 pn nuesinent [NK Ne WTEREST Duipenp ERANTS REVESUE RECEIPTS vy NEVER CRIEATE ANY LIARLLATY NOR CAUSE ANT HMDUCTION 1N ASSHTS ofthe govt, TAX REVENUE RECEIETS pIRKEN TAXISThe govt. earns profits through public sector undertakings(PSUs) |ik ; ‘dian Railways, BHEL, etc " DIVIDEND: Got also cars ividend fom investments the equity of PSUs GRANTS: Got. also receives financial help from foreign govt, and international fergavizations inthe form of grants and contributions eg. During niatural calamities like floods, earthquake, ec FEES AND FINES: Fines refer to those payments which are imposed on law breakers. Eg Fine forjumping a red light. Fees refer tothe charges which are jimposed by the govt. o cover the cost of the provided services. Such fees arc ‘only by those who receive such service. Eg. Govt. sehools, hospitals, etc SPECIAL ASSESSMENT: It is the payments which is made by the owners those properties whose value has appreciated die to development activities of the go¥L eg. Consiruction of the Meco ‘ESCHEAT nai ‘Tefers to the income of the state which arises out of the property ‘comes 10 in the absence of a Icgal heir. Such property has no claimant and alone bs the legal right over such prop ‘B CAPITAL RECEIPTS: Refer to those receipts WHICH FITHER CREATE A LIABILITY OR CAUSE A REDUCTION INTHE ASSETS OF THE GOVT. Capital receipis are nom ‘ecurring and non-routine in nature. Sources of capital receipts are; 4+. BORROWINGS: Funds raised by the Ot lomeet extess expenditure are termed asborrowings. Gov. borrows funds from the Central bank(RBI), Foreign ovis Fotemational institutions. cic. As borrowings CREATE A LIABILITY ‘ore BOM itis. a Capital receipt LOANS ‘sion tenitores are ASS! ‘from the debtors it therefore is The laons offered by the govt, tothe State govt. or IETS for the govt. When the govt, recovers these joans ‘leads to DECLINE IN THE ASSETS OF THE GOVT. and capital recsipt refers tothe act Jndertakings we capital receipts as they REDUCE THE RECEIPTS: It includes Disinvesement. Disinvestme OF selling & prt OF WhOle OF the shares of selected Public Sector held by the govt. Disinivastine nts ASSETS OF THE Govt, Fe earine wr the Wiha: ac ase from the pti tnthe tion be ing Cerificate). Kinan Vikas Patras (RP), etc These an FReeip athe hed 0 an ‘end (o an INCREASE IN THE LIAMILITY NDITURE : PENDITURE: 4p experts wh $ KEVENUE tire which eSU REATION OF ASSETS OW REDUCTION I Ligaen Ae SUTIN expendiure. Such expenditure av iawn “ OF THE GovT ESTIMATED EXP i "exper, oe Nc SSS on HEDLCTO ia on naeaeRRO ERENTmed to stare gow expenditure: Bg» Expenditure on purchising snd, bangs ans evarted 1° repayment of 104s, cl + OTHER TYPES OF EXPENDITURE OTR ES OE En SPLANNED EXPENDITURE: It penditure fo be incurred ss wer the five year pla Kor elated to the current Ir Foe NED EXPENDITURE: ispeno mea os® 2 7 NT EXPENDITURE; Cxpenkinpnaetiies whieh tr 0 nay fs ealted developmental expendi alt economic and social development of the Fog. Expendiune on agricultural and industrial GEVGaPRMEA education and 4. NON DEVELOPMENTAL EXPENDITURE: Espendinaean essential 8 neral services of Government is called Non-developmentatexpenctiure ig. Bxpenaane on poles defence, tax she base difference between the two is thatthe development expenditure dies 1 non-developmental expenditure des NOt OBJECTIVES OF GOVT, BUDGET |, REALLOCATION OF RESOURCES tn market econo, llpsation oF resources is Geiertnined by the forces of demand and supply, Reso es are allocated to the prod thase goods whieh bring high profits to their producers, Profits the sote motive b prodiction and hice social wel wed, The government corrects the allocation Fesources through its tax policy «Gov. diseournges the production of harrnful consumption goods like aleohol, cigar through heavy taxes linored by the private sector due to lock of pYofits or huge investment : PAPCONOMMEETABILITY. teonor sly grombles rena and evelopment. The i level Of aggregate deman : re mare expenditure to ruisg the leve! of MITE Mate earnargt in the economy ai INCOM EDUCING INEQUALITY IN INCOME AND WEALTHY REDISTRIBUTION OF i, lime even its busic needa “These taxes are 2 oven es tes eam be sid Fhe burden 0REVENUE RECEIPTS et of the ss se receipts Tar cepts lik ~ Borrowi