The Revenue Budget consists of the Government of India’s revenue receipts and the expenditure that is met using said revenue. It gives the details of the sources from where the government's revenue is coming.
Revenue receipts can be further classified into tax revenue and non-tax revenue. Income tax, corporate tax, excise, customs and other duties make up the tax revenues.
Corporation tax is the biggest source of revenue for the government. Public and private companies registered under the Companies Act, 1956, are liable to pay corporation tax.
It is levied on the net income of the company. The collection, surcharge, cess and other receipts make up a huge chunk of the revenue.
While non-tax revenue is the recurring income earned from sources other than taxes. They include interest receipts, received on loans given by the government to states, railways and others, and dividends and profits received from public sector companies.
Non-tax revenue also includes disinvestments that the government undertakes in companies where it holds a stake.
The payments that go towards the normal day-to-day running of the government’s departments and the various services that it offers make up the revenue expenditure.
Servicing interest on its borrowings, along with subsidies, among other things, are the other expenditures that the government has.
Any expenditure that does not go towards the creation of assets, along with grants given to state governments and other parties, are examples of revenue expenditure.
The government spends more than it earns, because of which the difference between revenue receipts and revenue expenditure is usually negative. This difference is called the revenue deficit.
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