Sources of Public Finance

The main sources of the Government’s revenue may be classified as tax revenue and non-tax revenue. 

For Tax Revenue, Government levied taxes like Union Excise Duties, Customs, Income Tax, Corporation Tax, Wealth Tax, Capital Gains Tax, Taxes on Foreign Remittance, and now unified GST to generate public revenue.  Government also borrows from local institutions as well as from international institutions, like IMF, World Bank and Asian Development Bank etc to finance the public expenditure for public welfare and for payments of imports and foreign interest or loan.

Alongwith this, Government also has shares in Public Sector Banks, Public Sector Units, like BHEL, BEL, SAIL and other Public Enterprises, like railways, highways, roadways transport and others from where government receives revenue in form of dividend or profits. Central Government also receives interests from the loan given to States.  It also receives revenue from the surplus profits of RBI.  Sometime Government circulates extra currency by printing it to increase public spending. 

Government also receives revenue as fees from the services rendered on public, like court fee, stamp fee, license fee, verification fee, Bills of Receipts from security provided to companies and VIPs, and other services.