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Central Government Revenue Receipts consist of all the income that the government earns from various sources without incurring any liabilities or reducing its assets. These receipts are crucial for funding the government’s day-to-day operations, such as public administration, defence, social services, and more. The revenue receipts of the central government can be broadly divided into two categories: Tax Revenue, Non-Tax Revenue.
In 1970-71, India’s total tax revenue was only 2,451 crore rupees, which skyrocketed to 23,30,631 crore rupees in 2023-24, representing an astronomical increase of about 950 times over 53 years. This exponential growth reflects India’s expanding economy, improvements in tax collection mechanisms, widening of the tax base, and overall economic development. In contrast, the nation’s non-tax revenue increased by approximately 358 times from 1970–71, when it was only 842 crore rupees, to 3,01,650 crore rupees in 2023–24. The slower growth and higher volatility in Non-Tax Revenue could be attributed to its nature, which includes sources like dividends from public sector enterprises, interest receipts, and various fees and charges that are more susceptible to economic fluctuations. The ratio between Tax and Non-Tax Revenue has shifted significantly over the years. In 1970–71, however, tax revenue was roughly 2.91 times that of non-tax revenue. In 2023–2024, this ratio rose to roughly 7.73, showing that tax revenue has increased to a significantly higher percentage of government receipts, indicating a growing dependence on tax revenue as the main source of funding for the government. The 1990s saw a significant acceleration in revenue growth, likely influenced by the economic liberalization policies implemented in 1991. The period from 2000 to 2010 reported robust growth in both Tax and Non-Tax Revenue, reflecting India’s rapid economic expansion during this decade. The years following the 2008 global financial crisis recorded some fluctuations, particularly in Non-Tax Revenue, indicating the impact of global economic conditions on India’s finances. The data for 2020-21 showed a dip in both Tax and Non-Tax Revenue, reflecting the economic impact of the COVID-19 pandemic. However, the subsequent years show a strong recovery. The most recent years (2021-22 to 2023-24) demonstrate substantial growth in Tax Revenue, possibly indicating improved tax compliance, economic recovery post-pandemic, and the impact of tax reforms like the Goods and Services Tax (GST). The consistent growth in Tax Revenue, particularly in recent years, suggests improvements in tax administration, widening of the tax base, and overall economic growth. However, the relatively slower growth in Non-Tax Revenue might indicate areas where the government could explore additional revenue sources or improve the performance of public sector enterprises.
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