Have you ever wondered where the government of a nation gets the money or funds to provide low-cost or free public facilities? Well, in reality, there is nothing free about it, it is actually the money of that country’s public which the government collects and then spends wisely on various things. And if you still have confusion about how the government raises funds to provide public facilities then keep on reading today’s post, and you’ll be able to understand this whole system and how it works. Because here we will be taking a look at how the government of India functions, and how it raises funds to provide public facilities to the general population of the country. So stay tuned for that.
What Is The Union Budget Of India?
You may have heard of the Union Budget of India that is presented to the Parliament of India every year in February month by the president. This budget is basically a statement of the total income and how the budget will be spent. Parliament passed this budget before the next financial year begins in the month of April. And in short, this Union Budget Of India is the thing that keeps the whole nation up and running. Without a proper budget in place, it is really hard for politicians and government officials to run the country. Now let’s talk about what are the income sources and spendings mentioned in this budget.
Government Income/Revenue Sources
The revenue of the government of India can be divided into basically two categories or parts. One is direct taxes, and the other one is indirect taxes. Let’s now take a look at the most important types of taxes that make up a huge portion of the government’s income in India.
1. Income Taxes
The government of India imposes income tax on every individual’s income or profit. The income taxes are decided as per the income tax slab, thus it depends upon every individual’s income or profits and how much income tax he/she needs to pay. And income taxes are the major revenue source for the government of India.
2. Corporate Taxes
It is mandatory for Indian as well as foreign companies to pay income tax on the annual income earned. The corporate tax percentage depends upon which category or sector a particular company works in.
3. Property Tax
If you own a property in India, no matter a house or an empty plot, you must pay the property tax to the government every fiscal year. The percentage of property tax may depend from state to state.
4. Goods and Services Tax
GST or Goods and Service Tax is actually a type of indirect tax that is collected from the general public whenever they buy some goods or opt for specific services.
5. Union Excise Duty
Whenever a manufacturing company pays a tax on the manufactured items, it is counted or called Union Excise Duty. Keep in mind that Union Excise Duty is actually a type of indirect tax.
6. Customs Duty
Customs duty is also a type of indirect tax that the government of India imposes on the transportation of goods between international borders.
Government Budget Spendings
Every financial year, the government of India makes a budget and then spends it wisely in various sectors for the betterment of the general public and the growth of the nation. For sure there is scope for improvement in how the government spends this budget, but we are for sure on the right path.
- Water Supply
- Road Constructions
- Bridge Constructions
- Basic Civic Services
- Government Officials’ Salary
- Politician’s Salary
- Government Schemes
And there you have it. This is how the government of India raises funds to provide public facilities to the general population.