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What’s the article about?
- It talks about the latest data released by the Controller General of Accounts (CAG) on the government's finances.
Relevance:
- GS3: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment; GS2: CAG
What’s the crux of the article?
- Although the government's tax revenues will undoubtedly exceed the budgetary goals, increased spending on capital projects, food subsidies, and fertiliser subsidies make it difficult to limit the fiscal deficit.
What is capex?
- Capital expenditure (CAPEX) is defined by the Union government as money spent on the acquisition of assets such as land, buildings, machinery, and equipment, as well as stock investments.
What is the difference between tax and non-tax revenue?
- The difference between tax revenue and non-tax revenue is that the former is charged on income earned by an entity, which is a direct tax and on the value of transaction of goods and services, which falls under indirect tax. On the other hand, non-tax revenue is charged against services provided by the government.
Key findings:
Revenue side:
- Gross tax collections have grown at a robust 18 per cent (budgetary estimate = 2%)
- The growth in taxes has been driven by direct taxes.
- Growth in indirect taxes has been constant.
- customs & excise collections = subdued,
- GST collections = constant
- Non-tax collections (dividends from public sector firms) = subdued
Expenditure side:
- The Center's overall spending is still driven by capital expenditures.
- Driven by = railways and road transport and highways capex.
Way Forward:
- A rise in tax revenue is unquestionably encouraging for the growth of the Indian economy. While CAPEX is required to further maintain steady growth, ensuring budgetary discipline is also crucial.
