The main source of revenue for state government in India– There are two main sources from where the State government generates revenue. These 2 sources are tax revenues and non-tax revenues. In tax revenues, state governments and local authorities generate revenue from the direct and indirect taxes paid by the consumers. In non-tax revenues state government and local authorities earn revenue from various sources other than tax. These include fees, income from government undertakings, income from state-owned properties, royalty, grants in aid, etc.
The major source of income for state government and local authorities is revenue generated from various taxes. Few of them are
This is one of the most major source of revenue for state government.
Also Read– FOOD INDUSTRY AND CORONAVIRUS
Non-tax Revenue refers to those sources of revenue that are outside the purview of what is levied on wealth, income, or property i.e. tax revenue. States that are rich in natural resources like mineral, ores generate non-tax revenues from non-tax sources like mining minerals and metals, etc. Other main sources of generating income are Interest received, Dividends, and Profits from State Public Sector Enterprises.
Non-tax revenues are also generated from various services provided by the government to the general public like electricity, water, gas supply, etc.
Also, the income that the govt earns through its general services like irrigation, power distribution, insurance, banking services, community, etc also makes the part of government business in generating revenues.
Also, the money that is earned by the government in the form of penalties, fees, fines, etc. form part of non-tax revenues. Also, for state governments, the grants provided by the central government may be the source of non-tax revenues. Non-tax revenue sources have been the major sources for the state government to boost up their revenues but less than tax revenues.
Repo Rate meaning: Repo Rate, or repurchase rate, is the key financial arrangement pace of revenue at which the national…