SlideShare a Scribd company logo
Indian Fiscal System
Fiscal System ,[object Object]
Fiscal System ,[object Object]
Division and functions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
The taxes over which there is legislative jurisdiction of centre extends fall under four groups  Group I The taxes which are levied and collected by the union and the proceed are retained by it. These are corporation tax, custom duties, taxes on capital value of asset .of individual. Group II The taxes levied and collected by the union but the proceed of which are shared with the states. These are Income tax and excise duties.
Group III The taxes which are levied and collected by the  union and the proceed are assigned to states with in which they are leviable. These are succession and estate duties in respect to property other then agriculture land ,taxes on goods and passenger  carried railway ,sea and air. Group IV The taxes which are levied  by the union but the proceed are of which are collected and retained by state. These are stamp duties and duties on excise on medicine and toilet preparation containing alcohol.
Expenditure of Government ,[object Object]
Non Plan expenditure ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
General Service+ Organ of state + tax collection + Police + Pension + Write off loan +others Social Service + Edu. Sports & Youth affairs + Health and family welfare +water supply +housing+ Information and broadcasting+ Labour and employment +Welfare of ST,SC & OBC +others Economic Services + Ag. & Allied activities +Rural development+ Irrigation and flood control +energy + Industry & minerals +Transport+Communication +Science Tech.& Env. Postal Services Loan + advances
Receipt of Central Government Tax Revenue  ( Corporation tax +Tax on income on other then Corporation Tax +Interest tax +Expenditure Tax +Custom +Union Excise Duties + Wealth Tax +Gift Tax +Other Tax +Taxes on UT + Service Tax) Non tax revenue  : Fiscal Service +Interest Receipt +Dividend and profit + Other general service +Social service +Economic Service +UT without Legislature + Grant–in–aid and contribution. Capital Receipts :  International debt Market +External assistance +Recovery of Loan +Small saving +State provident fund +Special deposit + Disinvestment +Others
Budget Deficit = Total Expenditure – Total Revenue (  The excess of revenue expenditure over revenue receipts.It shows the deficit of government on current account) Revenue Deficit = Revenue Expenditure – Revenue  Receipts ( The excess pf all expenditure over all types of receipts including borrowings)
Fiscal Deficit = Revenue Deficit + Capital expenditure ( The excess of expenditure over revenue receipts and non debt capital receipts. It represent the total borrowing requirement of the central government ) Primary Deficit = Gross Fiscal deficit – Interest Payments ( Fiscal deficit net of interest payments. It is the non interest deficit and reflects the current fiscal of the government.) Monetised Deficit :  The part of fiscal deficit which is financed by RBI through printing of notes.
What is the fiscal deficit? The fiscal deficit (FD) measure the shortfall in  government ability to fund its expenditure through  regular sources. Sources of funds for a government are of to kind-  revenue and capital The fiscal deficit is a measurable number which occurs in  the government statement. To get more technical , FD is what you take  away the total expenditure from the sum of  revenue receipt (T& NT), recoveries of loan  and other receipt
In case you are wondering what revenue expenditure is, it is administrative expenditure, and capital expenditure goes towards capital or asset formation. FD is important to annual budget. The budget is the government annual report, which differs from corporate annual report in one key area-a budget gives projection Or next year’s number alongside its performance for a finished year.
How is FD bridged ? FD represent the extent to which the government  needs fund, but does not have them. One simple way getting funds you don’t have  is to  Borrow. GoI is the largest borrower in India. Annual borrowings  Of Govt. are probably larger then that of entire  Corporate Sector. Besides, borrowing the govt. has another way of finding  funds it does not have. Being the law maker of the land gives the govt. the power to create money which is simply printing  additional notes .This is called monetization.
How to make sense of FD number ? Is it good or bad? FD to some extent is fine. One typically looks at ratio  of FD to gross domestic product. This ratio should ideally remain around 4% for a country like India. So says the IMF.A much higher number is bad news. Typically many nation and definitely developing nation, will run FD as govt, has the government has large role to play in the economy in areas like infrastructure, education, social support ( India does not have this), defense, Civil admn.  and so on. Government, Needs are likely    to more then its income in a growing    economy.
Why is FD so important? FD has a lot of impact on govt. policy. For example,  if it turns out to be very high in a year the govt will  have to either borrow a lot or print a lot of money.  Borrowing a lot will push up interest rate their by making the economy costlier and reducing  Competitiveness of goods produced Vis-à-vis  those made by other country. Printing lots of money breeds inflation, which is also  bad beyond a point. Sustained high deficits can lead to very high accumulation of debt by the govt. leading to  what is called internal debt trap.
How to keep FD in control? It is important  keep FD within a limit for this there are obvious  ways  Increase revenue or cut expenses or both. Revenue can  be increased in three fashion- increase tax rate or tax  more things or reduce tax evasion.  One example of tax more things is taxing agricultural income,  currently free from levy in India. In cutting expenses GoI has traditionally taken easier route. Like cutting infrastructure spending instead harder  ones like cutting subsidies or freezing recruitment.

More Related Content

What's hot

Regional imbalance
Regional imbalanceRegional imbalance
Regional imbalance
Sunita Sukhija
 
Principle of maximum social advantage
Principle of maximum social advantagePrinciple of maximum social advantage
Principle of maximum social advantage
Humsi Singh
 
Public budget
 Public budget Public budget
Public budget
TintoTom2
 
Planning mechanism in India
Planning mechanism in IndiaPlanning mechanism in India
Planning mechanism in India
Micheal Solomon Lawrence
 
Special Economic Zones (India)
Special Economic Zones (India)Special Economic Zones (India)
Special Economic Zones (India)
Brihan Maharashtra College of Commerce,Pune
 
Economic Planning: Rationale, Features and Objectives
Economic Planning: Rationale, Features and ObjectivesEconomic Planning: Rationale, Features and Objectives
Economic Planning: Rationale, Features and Objectives
ChandrikaSoni3
 
Public debt in india
Public debt in indiaPublic debt in india
Public debt in india
heerkhant
 
Regional imbalances
Regional imbalancesRegional imbalances
Regional imbalances
vijay kumar sarabu
 
Big Push Thheory By Prof. Rodan
Big Push Thheory By Prof. RodanBig Push Thheory By Prof. Rodan
Big Push Thheory By Prof. Rodan
Harsha Aswani
 
Vicious circle of poverty
Vicious circle of povertyVicious circle of poverty
Vicious circle of poverty
FarehaAsif
 
Debt Management
Debt ManagementDebt Management
Debt Management
Kiran Babu
 
Privatisation and disinvestment
Privatisation and disinvestmentPrivatisation and disinvestment
Privatisation and disinvestment
Visakhapatnam
 
Public expenditure
Public expenditurePublic expenditure
Public expenditure
jyotsanalal
 
Economic policy
Economic policyEconomic policy
Economic policy
domsr
 
Public Revenue
Public RevenuePublic Revenue
Public Revenue
Nithin Kumar
 
14th finance commission of India
14th finance commission of India14th finance commission of India
14th finance commission of India
Thazuala
 
Planning commission to niti aayog
Planning commission to niti aayogPlanning commission to niti aayog
Planning commission to niti aayog
Vaibhav verma
 
Pura scheme
Pura schemePura scheme
Pura scheme
Uddesh Meshram
 
Second generation reforms in india
Second generation reforms  in indiaSecond generation reforms  in india
Second generation reforms in india
Georgi Mathew
 
Federal Finance_Fiscal Economics.ppt
Federal Finance_Fiscal Economics.pptFederal Finance_Fiscal Economics.ppt
Federal Finance_Fiscal Economics.ppt
Satheesh Babu
 

What's hot (20)

Regional imbalance
Regional imbalanceRegional imbalance
Regional imbalance
 
Principle of maximum social advantage
Principle of maximum social advantagePrinciple of maximum social advantage
Principle of maximum social advantage
 
Public budget
 Public budget Public budget
Public budget
 
Planning mechanism in India
Planning mechanism in IndiaPlanning mechanism in India
Planning mechanism in India
 
Special Economic Zones (India)
Special Economic Zones (India)Special Economic Zones (India)
Special Economic Zones (India)
 
Economic Planning: Rationale, Features and Objectives
Economic Planning: Rationale, Features and ObjectivesEconomic Planning: Rationale, Features and Objectives
Economic Planning: Rationale, Features and Objectives
 
Public debt in india
Public debt in indiaPublic debt in india
Public debt in india
 
Regional imbalances
Regional imbalancesRegional imbalances
Regional imbalances
 
Big Push Thheory By Prof. Rodan
Big Push Thheory By Prof. RodanBig Push Thheory By Prof. Rodan
Big Push Thheory By Prof. Rodan
 
Vicious circle of poverty
Vicious circle of povertyVicious circle of poverty
Vicious circle of poverty
 
Debt Management
Debt ManagementDebt Management
Debt Management
 
Privatisation and disinvestment
Privatisation and disinvestmentPrivatisation and disinvestment
Privatisation and disinvestment
 
Public expenditure
Public expenditurePublic expenditure
Public expenditure
 
Economic policy
Economic policyEconomic policy
Economic policy
 
Public Revenue
Public RevenuePublic Revenue
Public Revenue
 
14th finance commission of India
14th finance commission of India14th finance commission of India
14th finance commission of India
 
Planning commission to niti aayog
Planning commission to niti aayogPlanning commission to niti aayog
Planning commission to niti aayog
 
Pura scheme
Pura schemePura scheme
Pura scheme
 
Second generation reforms in india
Second generation reforms  in indiaSecond generation reforms  in india
Second generation reforms in india
 
Federal Finance_Fiscal Economics.ppt
Federal Finance_Fiscal Economics.pptFederal Finance_Fiscal Economics.ppt
Federal Finance_Fiscal Economics.ppt
 

Viewers also liked

Federalism
FederalismFederalism
Federalism
satyasaha24
 
Fiscal Policy
Fiscal PolicyFiscal Policy
Fiscal Policy
Sheetal Narkar
 
Business Environment- Unit II- UPTU
Business Environment- Unit II- UPTUBusiness Environment- Unit II- UPTU
Business Environment- Unit II- UPTU
Lamay Sabir
 
Budget 2013 14 - copy
Budget 2013 14 - copyBudget 2013 14 - copy
Budget 2013 14 - copy
karan1071011
 
Fdi
FdiFdi
Fiscal Reforms in India
Fiscal Reforms in IndiaFiscal Reforms in India
Fiscal Reforms in India
Trisha Sinha Roy
 
Federalism in India
Federalism in IndiaFederalism in India
Federalism in India
Manisha Madhava
 
Fiscal Policy
Fiscal PolicyFiscal Policy
Fiscal Policy
DAVV
 
Chapter 2 Financial Institutions, Financial Intermediaries and Asset Manageme...
Chapter 2 Financial Institutions, Financial Intermediaries and Asset Manageme...Chapter 2 Financial Institutions, Financial Intermediaries and Asset Manageme...
Chapter 2 Financial Institutions, Financial Intermediaries and Asset Manageme...
Nardin A
 
Federalism
FederalismFederalism
Federalism
jose thottam
 
Technological envt
Technological envtTechnological envt
Technological envt
Bharat Malukani
 
FOREIGN CAPITAL
FOREIGN CAPITALFOREIGN CAPITAL
FOREIGN CAPITAL
Soumeet Sarkar
 
Legal Environment of Business - Business Law - Manu Melwin Joy
Legal Environment of Business - Business Law - Manu Melwin JoyLegal Environment of Business - Business Law - Manu Melwin Joy
Legal Environment of Business - Business Law - Manu Melwin Joy
manumelwin
 
3 political environment
3 political environment3 political environment
3 political environment
Nasriyah Adnan
 
Public Debt Philippines
Public Debt PhilippinesPublic Debt Philippines
Public Debt Philippines
Karen S.
 
Techonological environment
Techonological environmentTechonological environment
Techonological environment
Madhu Sudhan
 
Import - Export Policy of India (EXIM POLICY)
Import - Export Policy of  India(EXIM POLICY)Import - Export Policy of  India(EXIM POLICY)
Import - Export Policy of India (EXIM POLICY)
Sandip Besra
 
Legal environment of business
Legal environment of businessLegal environment of business
Legal environment of business
videoaakash15
 
Technological environment
Technological environmentTechnological environment
Technological environment
Nikita
 
Legal environment of business 1
Legal environment of business 1Legal environment of business 1
Legal environment of business 1
Mitul Sharma
 

Viewers also liked (20)

Federalism
FederalismFederalism
Federalism
 
Fiscal Policy
Fiscal PolicyFiscal Policy
Fiscal Policy
 
Business Environment- Unit II- UPTU
Business Environment- Unit II- UPTUBusiness Environment- Unit II- UPTU
Business Environment- Unit II- UPTU
 
Budget 2013 14 - copy
Budget 2013 14 - copyBudget 2013 14 - copy
Budget 2013 14 - copy
 
Fdi
FdiFdi
Fdi
 
Fiscal Reforms in India
Fiscal Reforms in IndiaFiscal Reforms in India
Fiscal Reforms in India
 
Federalism in India
Federalism in IndiaFederalism in India
Federalism in India
 
Fiscal Policy
Fiscal PolicyFiscal Policy
Fiscal Policy
 
Chapter 2 Financial Institutions, Financial Intermediaries and Asset Manageme...
Chapter 2 Financial Institutions, Financial Intermediaries and Asset Manageme...Chapter 2 Financial Institutions, Financial Intermediaries and Asset Manageme...
Chapter 2 Financial Institutions, Financial Intermediaries and Asset Manageme...
 
Federalism
FederalismFederalism
Federalism
 
Technological envt
Technological envtTechnological envt
Technological envt
 
FOREIGN CAPITAL
FOREIGN CAPITALFOREIGN CAPITAL
FOREIGN CAPITAL
 
Legal Environment of Business - Business Law - Manu Melwin Joy
Legal Environment of Business - Business Law - Manu Melwin JoyLegal Environment of Business - Business Law - Manu Melwin Joy
Legal Environment of Business - Business Law - Manu Melwin Joy
 
3 political environment
3 political environment3 political environment
3 political environment
 
Public Debt Philippines
Public Debt PhilippinesPublic Debt Philippines
Public Debt Philippines
 
Techonological environment
Techonological environmentTechonological environment
Techonological environment
 
Import - Export Policy of India (EXIM POLICY)
Import - Export Policy of  India(EXIM POLICY)Import - Export Policy of  India(EXIM POLICY)
Import - Export Policy of India (EXIM POLICY)
 
Legal environment of business
Legal environment of businessLegal environment of business
Legal environment of business
 
Technological environment
Technological environmentTechnological environment
Technological environment
 
Legal environment of business 1
Legal environment of business 1Legal environment of business 1
Legal environment of business 1
 

Similar to Indian Fiscal System

Public CHAPTER 3.docx
Public CHAPTER 3.docxPublic CHAPTER 3.docx
Public CHAPTER 3.docx
oneformany
 
Group13 a3 sec_a
Group13 a3 sec_aGroup13 a3 sec_a
Group13 a3 sec_a
mayankvns
 
Gov budget and economy
Gov budget and economyGov budget and economy
Gov budget and economy
vibhor07
 
Fiscal policy
Fiscal policyFiscal policy
Fiscal policy
Kinnar Majithia
 
Fiscal policy
Fiscal policyFiscal policy
Fiscal policy
madan kumar
 
Budget
BudgetBudget
PPT ON INCOME TAX.pptx
PPT ON INCOME TAX.pptxPPT ON INCOME TAX.pptx
PPT ON INCOME TAX.pptx
paridhi1601
 
Revenue for both Union and State Government by J.K. Saha, AAOMB (1).pptx
Revenue for both Union and State Government by J.K. Saha, AAOMB (1).pptxRevenue for both Union and State Government by J.K. Saha, AAOMB (1).pptx
Revenue for both Union and State Government by J.K. Saha, AAOMB (1).pptx
GUDAGUDA
 
Unit 14 government spending
Unit 14 government spendingUnit 14 government spending
Unit 14 government spending
gatorgirlnc
 
Unit 14 government spending
Unit 14 government spendingUnit 14 government spending
Unit 14 government spending
gatorgirlnc
 
Fiscal+policy
Fiscal+policyFiscal+policy
Fiscal+policy
videoaakash15
 
Fiscal policy of india
Fiscal policy of indiaFiscal policy of india
Fiscal policy of india
PavelSarkar2
 
Government Budget
Government BudgetGovernment Budget
Government Budget
AshmitGupta8
 
Everything about the fiscal deficit
Everything about the fiscal deficitEverything about the fiscal deficit
Everything about the fiscal deficit
KshitijaMavle1
 
Unit 14 government spending and revenue
Unit 14 government spending and revenueUnit 14 government spending and revenue
Unit 14 government spending and revenue
NCVPS
 
Unit 14 government spending and revenue
Unit 14 government spending and revenueUnit 14 government spending and revenue
Unit 14 government spending and revenue
NCVPS
 
Unit 4 Government Budget & The Economy
Unit   4 Government Budget & The EconomyUnit   4 Government Budget & The Economy
Unit 4 Government Budget & The Economy
Ritvik Tolumbia
 
Government Budget and the Economy CLASS 12 NOTES (1).pdf
Government Budget and the Economy CLASS 12 NOTES (1).pdfGovernment Budget and the Economy CLASS 12 NOTES (1).pdf
Government Budget and the Economy CLASS 12 NOTES (1).pdf
RENAISSANCEACADEMY
 
Unit 14 federal budget
Unit 14 federal budgetUnit 14 federal budget
Unit 14 federal budget
NCVPS
 
Unit 14 federal budget
Unit 14 federal budgetUnit 14 federal budget
Unit 14 federal budget
gatorgirlnc
 

Similar to Indian Fiscal System (20)

Public CHAPTER 3.docx
Public CHAPTER 3.docxPublic CHAPTER 3.docx
Public CHAPTER 3.docx
 
Group13 a3 sec_a
Group13 a3 sec_aGroup13 a3 sec_a
Group13 a3 sec_a
 
Gov budget and economy
Gov budget and economyGov budget and economy
Gov budget and economy
 
Fiscal policy
Fiscal policyFiscal policy
Fiscal policy
 
Fiscal policy
Fiscal policyFiscal policy
Fiscal policy
 
Budget
BudgetBudget
Budget
 
PPT ON INCOME TAX.pptx
PPT ON INCOME TAX.pptxPPT ON INCOME TAX.pptx
PPT ON INCOME TAX.pptx
 
Revenue for both Union and State Government by J.K. Saha, AAOMB (1).pptx
Revenue for both Union and State Government by J.K. Saha, AAOMB (1).pptxRevenue for both Union and State Government by J.K. Saha, AAOMB (1).pptx
Revenue for both Union and State Government by J.K. Saha, AAOMB (1).pptx
 
Unit 14 government spending
Unit 14 government spendingUnit 14 government spending
Unit 14 government spending
 
Unit 14 government spending
Unit 14 government spendingUnit 14 government spending
Unit 14 government spending
 
Fiscal+policy
Fiscal+policyFiscal+policy
Fiscal+policy
 
Fiscal policy of india
Fiscal policy of indiaFiscal policy of india
Fiscal policy of india
 
Government Budget
Government BudgetGovernment Budget
Government Budget
 
Everything about the fiscal deficit
Everything about the fiscal deficitEverything about the fiscal deficit
Everything about the fiscal deficit
 
Unit 14 government spending and revenue
Unit 14 government spending and revenueUnit 14 government spending and revenue
Unit 14 government spending and revenue
 
Unit 14 government spending and revenue
Unit 14 government spending and revenueUnit 14 government spending and revenue
Unit 14 government spending and revenue
 
Unit 4 Government Budget & The Economy
Unit   4 Government Budget & The EconomyUnit   4 Government Budget & The Economy
Unit 4 Government Budget & The Economy
 
Government Budget and the Economy CLASS 12 NOTES (1).pdf
Government Budget and the Economy CLASS 12 NOTES (1).pdfGovernment Budget and the Economy CLASS 12 NOTES (1).pdf
Government Budget and the Economy CLASS 12 NOTES (1).pdf
 
Unit 14 federal budget
Unit 14 federal budgetUnit 14 federal budget
Unit 14 federal budget
 
Unit 14 federal budget
Unit 14 federal budgetUnit 14 federal budget
Unit 14 federal budget
 

More from historica vision edu. pvt. ltd.

Corporate Social Responsibility
Corporate Social ResponsibilityCorporate Social Responsibility
Corporate Social Responsibility
historica vision edu. pvt. ltd.
 
Emergence Of New India
Emergence  Of  New  IndiaEmergence  Of  New  India
Emergence Of New India
historica vision edu. pvt. ltd.
 
Fera To Fema
Fera To FemaFera To Fema
Fdi Of India
Fdi Of IndiaFdi Of India
Commercial Banks
Commercial BanksCommercial Banks
Carbaugh10e Ch08
Carbaugh10e Ch08Carbaugh10e Ch08
Business Ethics
Business EthicsBusiness Ethics
Business Charateristic And Goal
Business   Charateristic And GoalBusiness   Charateristic And Goal
Business Charateristic And Goal
historica vision edu. pvt. ltd.
 
Indian Financial System
Indian Financial SystemIndian Financial System
Indian Financial System
historica vision edu. pvt. ltd.
 
Final Unemployment
Final UnemploymentFinal Unemployment
Haley Powe Point[1]
Haley Powe Point[1]Haley Powe Point[1]
Haley Powe Point[1]
historica vision edu. pvt. ltd.
 
India Fastes Growing Economy
India Fastes Growing EconomyIndia Fastes Growing Economy
India Fastes Growing Economy
historica vision edu. pvt. ltd.
 
Industrial Policy
Industrial PolicyIndustrial Policy
Instrument Of Trade Policy(M)
Instrument Of Trade Policy(M)Instrument Of Trade Policy(M)
Instrument Of Trade Policy(M)
historica vision edu. pvt. ltd.
 
Malasiyan Planning
Malasiyan PlanningMalasiyan Planning
Money Supply In India
Money Supply In IndiaMoney Supply In India
Money Supply In India
historica vision edu. pvt. ltd.
 
Presentation Page 232 233
Presentation Page 232 233Presentation Page 232 233
Presentation Page 232 233
historica vision edu. pvt. ltd.
 
Public And Private Sector In India
Public And Private Sector In IndiaPublic And Private Sector In India
Public And Private Sector In India
historica vision edu. pvt. ltd.
 
Rbi
RbiRbi
Regulatory Frame Work
Regulatory Frame WorkRegulatory Frame Work
Regulatory Frame Work
historica vision edu. pvt. ltd.
 

More from historica vision edu. pvt. ltd. (20)

Corporate Social Responsibility
Corporate Social ResponsibilityCorporate Social Responsibility
Corporate Social Responsibility
 
Emergence Of New India
Emergence  Of  New  IndiaEmergence  Of  New  India
Emergence Of New India
 
Fera To Fema
Fera To FemaFera To Fema
Fera To Fema
 
Fdi Of India
Fdi Of IndiaFdi Of India
Fdi Of India
 
Commercial Banks
Commercial BanksCommercial Banks
Commercial Banks
 
Carbaugh10e Ch08
Carbaugh10e Ch08Carbaugh10e Ch08
Carbaugh10e Ch08
 
Business Ethics
Business EthicsBusiness Ethics
Business Ethics
 
Business Charateristic And Goal
Business   Charateristic And GoalBusiness   Charateristic And Goal
Business Charateristic And Goal
 
Indian Financial System
Indian Financial SystemIndian Financial System
Indian Financial System
 
Final Unemployment
Final UnemploymentFinal Unemployment
Final Unemployment
 
Haley Powe Point[1]
Haley Powe Point[1]Haley Powe Point[1]
Haley Powe Point[1]
 
India Fastes Growing Economy
India Fastes Growing EconomyIndia Fastes Growing Economy
India Fastes Growing Economy
 
Industrial Policy
Industrial PolicyIndustrial Policy
Industrial Policy
 
Instrument Of Trade Policy(M)
Instrument Of Trade Policy(M)Instrument Of Trade Policy(M)
Instrument Of Trade Policy(M)
 
Malasiyan Planning
Malasiyan PlanningMalasiyan Planning
Malasiyan Planning
 
Money Supply In India
Money Supply In IndiaMoney Supply In India
Money Supply In India
 
Presentation Page 232 233
Presentation Page 232 233Presentation Page 232 233
Presentation Page 232 233
 
Public And Private Sector In India
Public And Private Sector In IndiaPublic And Private Sector In India
Public And Private Sector In India
 
Rbi
RbiRbi
Rbi
 
Regulatory Frame Work
Regulatory Frame WorkRegulatory Frame Work
Regulatory Frame Work
 

Recently uploaded

clinical examination of hip joint (1).pdf
clinical examination of hip joint (1).pdfclinical examination of hip joint (1).pdf
clinical examination of hip joint (1).pdf
Priyankaranawat4
 
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
Nguyen Thanh Tu Collection
 
Leveraging Generative AI to Drive Nonprofit Innovation
Leveraging Generative AI to Drive Nonprofit InnovationLeveraging Generative AI to Drive Nonprofit Innovation
Leveraging Generative AI to Drive Nonprofit Innovation
TechSoup
 
writing about opinions about Australia the movie
writing about opinions about Australia the moviewriting about opinions about Australia the movie
writing about opinions about Australia the movie
Nicholas Montgomery
 
How to Fix the Import Error in the Odoo 17
How to Fix the Import Error in the Odoo 17How to Fix the Import Error in the Odoo 17
How to Fix the Import Error in the Odoo 17
Celine George
 
How to Build a Module in Odoo 17 Using the Scaffold Method
How to Build a Module in Odoo 17 Using the Scaffold MethodHow to Build a Module in Odoo 17 Using the Scaffold Method
How to Build a Module in Odoo 17 Using the Scaffold Method
Celine George
 
Life upper-Intermediate B2 Workbook for student
Life upper-Intermediate B2 Workbook for studentLife upper-Intermediate B2 Workbook for student
Life upper-Intermediate B2 Workbook for student
NgcHiNguyn25
 
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
National Information Standards Organization (NISO)
 
How to Setup Warehouse & Location in Odoo 17 Inventory
How to Setup Warehouse & Location in Odoo 17 InventoryHow to Setup Warehouse & Location in Odoo 17 Inventory
How to Setup Warehouse & Location in Odoo 17 Inventory
Celine George
 
The History of Stoke Newington Street Names
The History of Stoke Newington Street NamesThe History of Stoke Newington Street Names
The History of Stoke Newington Street Names
History of Stoke Newington
 
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
GeorgeMilliken2
 
How to deliver Powerpoint Presentations.pptx
How to deliver Powerpoint  Presentations.pptxHow to deliver Powerpoint  Presentations.pptx
How to deliver Powerpoint Presentations.pptx
HajraNaeem15
 
Main Java[All of the Base Concepts}.docx
Main Java[All of the Base Concepts}.docxMain Java[All of the Base Concepts}.docx
Main Java[All of the Base Concepts}.docx
adhitya5119
 
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
PECB
 
Cognitive Development Adolescence Psychology
Cognitive Development Adolescence PsychologyCognitive Development Adolescence Psychology
Cognitive Development Adolescence Psychology
paigestewart1632
 
ANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
ANATOMY AND BIOMECHANICS OF HIP JOINT.pdfANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
ANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
Priyankaranawat4
 
Chapter wise All Notes of First year Basic Civil Engineering.pptx
Chapter wise All Notes of First year Basic Civil Engineering.pptxChapter wise All Notes of First year Basic Civil Engineering.pptx
Chapter wise All Notes of First year Basic Civil Engineering.pptx
Denish Jangid
 
How to Make a Field Mandatory in Odoo 17
How to Make a Field Mandatory in Odoo 17How to Make a Field Mandatory in Odoo 17
How to Make a Field Mandatory in Odoo 17
Celine George
 
PIMS Job Advertisement 2024.pdf Islamabad
PIMS Job Advertisement 2024.pdf IslamabadPIMS Job Advertisement 2024.pdf Islamabad
PIMS Job Advertisement 2024.pdf Islamabad
AyyanKhan40
 
Pengantar Penggunaan Flutter - Dart programming language1.pptx
Pengantar Penggunaan Flutter - Dart programming language1.pptxPengantar Penggunaan Flutter - Dart programming language1.pptx
Pengantar Penggunaan Flutter - Dart programming language1.pptx
Fajar Baskoro
 

Recently uploaded (20)

clinical examination of hip joint (1).pdf
clinical examination of hip joint (1).pdfclinical examination of hip joint (1).pdf
clinical examination of hip joint (1).pdf
 
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
BÀI TẬP BỔ TRỢ TIẾNG ANH LỚP 9 CẢ NĂM - GLOBAL SUCCESS - NĂM HỌC 2024-2025 - ...
 
Leveraging Generative AI to Drive Nonprofit Innovation
Leveraging Generative AI to Drive Nonprofit InnovationLeveraging Generative AI to Drive Nonprofit Innovation
Leveraging Generative AI to Drive Nonprofit Innovation
 
writing about opinions about Australia the movie
writing about opinions about Australia the moviewriting about opinions about Australia the movie
writing about opinions about Australia the movie
 
How to Fix the Import Error in the Odoo 17
How to Fix the Import Error in the Odoo 17How to Fix the Import Error in the Odoo 17
How to Fix the Import Error in the Odoo 17
 
How to Build a Module in Odoo 17 Using the Scaffold Method
How to Build a Module in Odoo 17 Using the Scaffold MethodHow to Build a Module in Odoo 17 Using the Scaffold Method
How to Build a Module in Odoo 17 Using the Scaffold Method
 
Life upper-Intermediate B2 Workbook for student
Life upper-Intermediate B2 Workbook for studentLife upper-Intermediate B2 Workbook for student
Life upper-Intermediate B2 Workbook for student
 
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
Pollock and Snow "DEIA in the Scholarly Landscape, Session One: Setting Expec...
 
How to Setup Warehouse & Location in Odoo 17 Inventory
How to Setup Warehouse & Location in Odoo 17 InventoryHow to Setup Warehouse & Location in Odoo 17 Inventory
How to Setup Warehouse & Location in Odoo 17 Inventory
 
The History of Stoke Newington Street Names
The History of Stoke Newington Street NamesThe History of Stoke Newington Street Names
The History of Stoke Newington Street Names
 
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
What is Digital Literacy? A guest blog from Andy McLaughlin, University of Ab...
 
How to deliver Powerpoint Presentations.pptx
How to deliver Powerpoint  Presentations.pptxHow to deliver Powerpoint  Presentations.pptx
How to deliver Powerpoint Presentations.pptx
 
Main Java[All of the Base Concepts}.docx
Main Java[All of the Base Concepts}.docxMain Java[All of the Base Concepts}.docx
Main Java[All of the Base Concepts}.docx
 
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
ISO/IEC 27001, ISO/IEC 42001, and GDPR: Best Practices for Implementation and...
 
Cognitive Development Adolescence Psychology
Cognitive Development Adolescence PsychologyCognitive Development Adolescence Psychology
Cognitive Development Adolescence Psychology
 
ANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
ANATOMY AND BIOMECHANICS OF HIP JOINT.pdfANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
ANATOMY AND BIOMECHANICS OF HIP JOINT.pdf
 
Chapter wise All Notes of First year Basic Civil Engineering.pptx
Chapter wise All Notes of First year Basic Civil Engineering.pptxChapter wise All Notes of First year Basic Civil Engineering.pptx
Chapter wise All Notes of First year Basic Civil Engineering.pptx
 
How to Make a Field Mandatory in Odoo 17
How to Make a Field Mandatory in Odoo 17How to Make a Field Mandatory in Odoo 17
How to Make a Field Mandatory in Odoo 17
 
PIMS Job Advertisement 2024.pdf Islamabad
PIMS Job Advertisement 2024.pdf IslamabadPIMS Job Advertisement 2024.pdf Islamabad
PIMS Job Advertisement 2024.pdf Islamabad
 
Pengantar Penggunaan Flutter - Dart programming language1.pptx
Pengantar Penggunaan Flutter - Dart programming language1.pptxPengantar Penggunaan Flutter - Dart programming language1.pptx
Pengantar Penggunaan Flutter - Dart programming language1.pptx
 

Indian Fiscal System

  • 2.
  • 3.
  • 4.
  • 5. The taxes over which there is legislative jurisdiction of centre extends fall under four groups Group I The taxes which are levied and collected by the union and the proceed are retained by it. These are corporation tax, custom duties, taxes on capital value of asset .of individual. Group II The taxes levied and collected by the union but the proceed of which are shared with the states. These are Income tax and excise duties.
  • 6. Group III The taxes which are levied and collected by the union and the proceed are assigned to states with in which they are leviable. These are succession and estate duties in respect to property other then agriculture land ,taxes on goods and passenger carried railway ,sea and air. Group IV The taxes which are levied by the union but the proceed are of which are collected and retained by state. These are stamp duties and duties on excise on medicine and toilet preparation containing alcohol.
  • 7.
  • 8.
  • 9. General Service+ Organ of state + tax collection + Police + Pension + Write off loan +others Social Service + Edu. Sports & Youth affairs + Health and family welfare +water supply +housing+ Information and broadcasting+ Labour and employment +Welfare of ST,SC & OBC +others Economic Services + Ag. & Allied activities +Rural development+ Irrigation and flood control +energy + Industry & minerals +Transport+Communication +Science Tech.& Env. Postal Services Loan + advances
  • 10. Receipt of Central Government Tax Revenue ( Corporation tax +Tax on income on other then Corporation Tax +Interest tax +Expenditure Tax +Custom +Union Excise Duties + Wealth Tax +Gift Tax +Other Tax +Taxes on UT + Service Tax) Non tax revenue : Fiscal Service +Interest Receipt +Dividend and profit + Other general service +Social service +Economic Service +UT without Legislature + Grant–in–aid and contribution. Capital Receipts : International debt Market +External assistance +Recovery of Loan +Small saving +State provident fund +Special deposit + Disinvestment +Others
  • 11. Budget Deficit = Total Expenditure – Total Revenue ( The excess of revenue expenditure over revenue receipts.It shows the deficit of government on current account) Revenue Deficit = Revenue Expenditure – Revenue Receipts ( The excess pf all expenditure over all types of receipts including borrowings)
  • 12. Fiscal Deficit = Revenue Deficit + Capital expenditure ( The excess of expenditure over revenue receipts and non debt capital receipts. It represent the total borrowing requirement of the central government ) Primary Deficit = Gross Fiscal deficit – Interest Payments ( Fiscal deficit net of interest payments. It is the non interest deficit and reflects the current fiscal of the government.) Monetised Deficit : The part of fiscal deficit which is financed by RBI through printing of notes.
  • 13. What is the fiscal deficit? The fiscal deficit (FD) measure the shortfall in government ability to fund its expenditure through regular sources. Sources of funds for a government are of to kind- revenue and capital The fiscal deficit is a measurable number which occurs in the government statement. To get more technical , FD is what you take away the total expenditure from the sum of revenue receipt (T& NT), recoveries of loan and other receipt
  • 14. In case you are wondering what revenue expenditure is, it is administrative expenditure, and capital expenditure goes towards capital or asset formation. FD is important to annual budget. The budget is the government annual report, which differs from corporate annual report in one key area-a budget gives projection Or next year’s number alongside its performance for a finished year.
  • 15. How is FD bridged ? FD represent the extent to which the government needs fund, but does not have them. One simple way getting funds you don’t have is to Borrow. GoI is the largest borrower in India. Annual borrowings Of Govt. are probably larger then that of entire Corporate Sector. Besides, borrowing the govt. has another way of finding funds it does not have. Being the law maker of the land gives the govt. the power to create money which is simply printing additional notes .This is called monetization.
  • 16. How to make sense of FD number ? Is it good or bad? FD to some extent is fine. One typically looks at ratio of FD to gross domestic product. This ratio should ideally remain around 4% for a country like India. So says the IMF.A much higher number is bad news. Typically many nation and definitely developing nation, will run FD as govt, has the government has large role to play in the economy in areas like infrastructure, education, social support ( India does not have this), defense, Civil admn. and so on. Government, Needs are likely to more then its income in a growing economy.
  • 17. Why is FD so important? FD has a lot of impact on govt. policy. For example, if it turns out to be very high in a year the govt will have to either borrow a lot or print a lot of money. Borrowing a lot will push up interest rate their by making the economy costlier and reducing Competitiveness of goods produced Vis-à-vis those made by other country. Printing lots of money breeds inflation, which is also bad beyond a point. Sustained high deficits can lead to very high accumulation of debt by the govt. leading to what is called internal debt trap.
  • 18. How to keep FD in control? It is important keep FD within a limit for this there are obvious ways Increase revenue or cut expenses or both. Revenue can be increased in three fashion- increase tax rate or tax more things or reduce tax evasion. One example of tax more things is taxing agricultural income, currently free from levy in India. In cutting expenses GoI has traditionally taken easier route. Like cutting infrastructure spending instead harder ones like cutting subsidies or freezing recruitment.