How Government Earn and Spend

How Government Income (Approximate Figures)

1. 19% comes from Borrowing (Central Government borrow money through Market Loans, Treasury Bills, Bonds, Securities issued to Internal Financial Institutions, National Small Savings Fund, State Provident Fund, Reserve Funds & Deposits etc.)

2. 16% comes from Income Tax paid by Taxpayers including individuals, companies, HUF, partnership firms etc.

3. 9% comes from Custom Duty paid on Imports of goods.

4. 24% comes from Indirect Taxes (Good & Services Tax etc)

5. 19% comes from Corporate Tax (Corporate Tax in India is levied on both Domestic & Foreign Companies. Presently Corporate Tax in India for Domestic Companies are 30%, in case Domestic Companies Turnover is upto Rs 50 crores in Financial Year 2017-18 then tax rate is 25%, Corporate Tax For Foreign Companies is 40%.)
   
6. 13% comes from other sources like Disinvestment, Dividends received from Government Companies, Reserve Bank of India etc.


How Government Expenditure (Approximate Figures)

1. 29% is allocated to State Government for expenditure, growth in the state.

2. 21% is allocated for Central Government Schemes which are announce for the betterment of people living in the country and growth of the country.

3. 10% is allocated for subsidies given by Central Government. (Subsidies means amount given by Central Government on behalf of consumers like gas subsidy etc.)

4. 9% is allocated for Defence Sector for purchase of equipments, aircrafts, missiles etc.

5. 18% is allocated for Interest on borrowings.

6. 13% is given for Other Expenditure.


Fiscal Deficit = Total Expenditure - Total Income
Fiscal Deficit means when Central Governments expenditure exceeds income. It is a situation of Fiscal Deficit. Currently, India's Fiscal Deficit stood at 3.2% of GDP in FY 2018.

Following are the previous years Fiscal Deficit and Growth Rate Figures.
Year       Fiscal Deficit      Growth Rate
2008-09      6.0%                       8.5%
2009-10      6.4%                      10.3%
2010-11      4.9%                       6.6%
2011-12      2.7%                       5.5%
2012-13      4.8%                       6.4%
2013-14      4.4%                       7.5%

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