Non-tax revenue is the income earned by the government from sources other than taxation. It includes various streams such as interest receipts, dividends and profits, fees, fines, and grants. Among these, interest receipts form a notable component. These are payments received by the government as a return on loans and advances it has extended to other entities—such as state governments, public sector enterprises (PSEs), and foreign governments. The interest collected reflects the government’s role as a lender and its financial engagements in developmental and cooperative activities.

The relevance of this indicator lies in its contribution to overall fiscal health. Interest receipts serve as a steady income source, helping to partially offset the government’s expenditure and reduce fiscal deficits. For example, when the central government lends to states for infrastructure or welfare schemes, the interest accrued becomes a part of future revenue inflows. Moreover, strong interest receipts may indicate prudent lending practices and robust returns on public investments. In macroeconomic terms, higher non-tax revenue allows the government to manage public debt more efficiently and maintain financial discipline without over-reliance on taxation. This, in turn, creates fiscal space for welfare programs, capital investment, and economic stimulus during downturns—underscoring the strategic value of interest receipts in public finance.