Government needs large amounts of resources to perform various political, social and economic duties to maximize welfare. Public revenues, which include taxes and non-tax sources of income, are these key resources. Tax revenues come from direct taxes like income tax and corporate tax, as well as indirect taxes like VAT, GST, customs and excise duties. Non-tax revenues include fees, fines, and proceeds from public enterprises. When revenues from taxes and non-tax sources are insufficient, the government obtains capital receipts through borrowing from small savings, provident funds, and loan recoveries. Overall, a just tax system that raises adequate and stable revenues is vital for a country's development.

1. -INDIAN PERSPECTIVE

3. • Government needs to perform political, social and economic duties so as to
maximize social and economic welfare. In order to perform these duties and
functions government requires large amount of resources .
• Various sources of revenue to the governments, viz. Central, State and Local
Governments, are called Public Revenues.
• Development of agriculture, industries & infrastructure, defense,
maintenance of law & order, conducting elections, serving public debt & any
unforeseen expenses.

4. “It was only for the good of his subjects that he collected taxes
from them, just as the Sun draws moisture from the earth to give it
back a thousand fold" –
--Kalidas in Raghuvansham

5. • Kautilya's Arthasastra, written sometime in 300 B.C.was the first authoritative text on public finance,
administration and the fiscal laws in this country. A major portion of Arthasastra is devoted by Kautilya
to financial matters including financial administration.
• Collection of land revenue formed an important source of revenue to the State. The State not only
collected a part of the agricultural produce which was normally one sixth but also levied water rates,
octroi duties, tolls and customs duties.
• Taxes were also collected on forest produce as well as from mining of metals etc. Salt tax was an
important source of revenue. Collection of Income-tax was well organized and it constituted a major
part of the revenue of the State.
• A big portion was collected in the form of income-tax from dancers, musicians, actors and dancing girls,
etc. This taxation was not progressive but proportional to the fluctuating income. General Sales-tax was
also levied on sales and the sale and the purchase of buildings was also subject to tax. Even gambling
operations were centralised and tax was collected on these operations.
• According to him, the power of the government depended upon the strength of its treasury. He states –
"From the treasury, comes the power of the government, and the Earth whose .ornament is the
treasury, is acquired by means of the Treasury and Army “.
• The land revenue was fixed at 1/6 share of the produce and import and export duties were determined
on advalorem basis.The import duties on foreign goods were roughly 20 per cent of their value.
Similarly, tolls, road cess, ferry charges and other levies were all fixed. Kautilya's concept of taxation is
more or less akin to the modern system of taxation. His over all emphasis was on equity and justice in
taxation.

6. INTRODUCTION *** ARTICLE 112 OF THE CONSTITUTION OF INDIA STATES THAT “AN ANNUAL FINANCIAL
STATEMENT WILL BE PLACED BEFORE LOKSABHA AND RAJYA SABHA . THIS IS CALLED BUDJET OF THE
GOVERNMENT”. SIMILIARLY, EACH STATES GOVERNMENT IS REQUIRED AN ANNUAL FINANCIAL STATEMENT.
THE MAIN COMPONENTS OF A BUDJET IS REVENUE RECEIPTS OF THE GOVERNMENT FROM VARIOUS
SOURCES. FOR MEETING THE REVENUE EXPENDITURE OF THE GOVERNMENT. THE OBJECTIVE , MEANING
AND COMPONENTS OF REVENUE RECEIPTS ARE AS FOLLOWS.
GOVERNMENT THROUGH FISCAL TOOLS OF TAXATION ,SUBSIDIES AND TRANSFER PAYMENTS BRING
ABOUT ‘FAIR’ DISTRIBUTION OF INCOME AND WEALTH AS A WAY TO BRING SOCIAL JUSTICE .
• To contribute to economic development
• Reallocation of resources
• Mobilization of economic surplus
• Increasing the incremental saving ratio

7. “Government needs to perform various activities in the field of
political ,social and economic to maximize social and economic
welfare . In order to perform these duties and functions government
require large amount of resources . This resources are called Public
Revenues .”

8. Sources of
public
revenue
Tax revenue
Direct Tax
Income tax
Corporate tax
Wealth Tax
Indirect tax
VAT
GST
Custom &
Excise duty
Non Tax
Revenue
Interest
Fine &
Penalties
Fee
Capital
Receipt
Internal &
External
borrowing
Small Saving
Provident
Fund
Loan
recovery

9. Tax revenue refers to the income that is gained by the government through taxation.It may be in
the form of :-
• Direct Tax
• Indirect Tax
The term direct tax generally means a tax paid directly to the government by the persons on
whom it is imposed. Such as :- income tax etc.
SOURCES OF DIRECT TAX :-
• Income tax
• Corporate tax
• Wealth tax
• Interest tax
• Securities transaction tax

10. An Indirect Tax is one in which the burden can be shifted to others. The tax payers is not the tax
bearer. The impact and incidence of indirect taxes are on different persons. An indirect tax is
levied on and collected from a persons who manages to pass it on to some other person or
persons on whom the real burden of tax falls. For e.g.. commodity taxes or sales tax etc. are
Indirect Taxes.
SOURCES OF INDIRECT TAX:-
• Central Excise duty
• Custom duty
• Service tax
• Other tax and duties

11. NON TAX REVENUE :-
The union government gets revenue from other sources as well. They are collectively calledas non-tax
revenues. Thus, revenues mobilized from sources other than taxes are called non-tax revenue. Central
Government mobilized Rs. 1,02,378 crore from this source during 2007- 08 (BE). The sources of non –tax
revenue are explained below. Non-tax revenue has 12 percent share in the total revenue of central
government. The expected revenue from his source in 2010-11 is 11 percent.
SOURCES OF NON TAX REVENUE :-
• fee
• Fine & penalties
• Surplus from public enterprises
• Grants & gifts
• Deficit financing

12. When revenue mobilized through tax and non-tax sources is insufficient to meet its expenditures, the
central government will try to mobilize income through capital receipts.
SOURCES OF CAPITAL RECEIPTS :-
• Internal & external borrowings.
• Small savings
• Provident funds
• Loan recovery

13. Just and Equitable
Progressive
Elastic
Productive
Anti-Inflationary
Effective
Certain
Arbitrary
Unpopular
Inconvenient
Evasion
Uneconomical
Narrow Base
Tax on Honesty

14. MERITS
Convenient
No Tax Evasion
Broad Tax Base
Social Value
Economical
Effective
Progressive
DEMERITS
Unjust
Inflationary
Uncertain
Savings Affected
Not Economical
No Link
Inequitable

15. TAX COLLECTION

17. • Revenue earned by the government is used to incure developmental and non-developmental expenses.
• Government should design ways to develop multiple sources of revenue to reduce dependence on any
one.
• A just and fair tax system should be designed keeping in mind equal distribution of wealth and
transparency in economy for overall development of the country.
• A good tax system is required for the over all development of any economy.
“We can say that Public Revenue is like soul of any country’s economy .“