A question that is on most people’s minds is how the government calculates it. Where does the government get its income and what does it spend money on?
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Finance Minister Nirmala Sitharaman will present the budget on 1 February 2023. In this, the government will present the financial account of the next financial year. The government can also make big announcements. Before budgeting it is necessary to understand some things related to it. A question that is on most people’s minds is how the government calculates it. Where does the government get its income and what does it spend money on? Let’s understand it.
come from here
- Central government debt and liabilities are the largest sources from which money flows into the economy. The government gets 35 percent through loans.
- Apart from this, GST collection is also a major part of the government’s revenue. For the current year, 16 percent of the central government’s revenue came from GST collection. The Goods and Services Tax or GST was implemented in 2017. It replaced several taxes levied by the central and state governments. It has since become a major part of the government’s indirect tax collection. In 2021-22, more than 57 percent of indirect tax collections were derived from GST.
- Income tax and corporate tax collection is the third largest source of government revenue. Budget documents presented last year show that it contributed 15 percent of the government’s revenue.
- Central excise duty, non-tax revenue and customs are other sources of government revenue.
The government spends here
- A large portion of government expenditure goes to interest payments. Next, states have their share of taxes and duties.
- The central government announces schemes for various sectors of the economy. He spends 15 percent of his money on it. Whereas, 10 percent money goes as commission and other transfers.
- At the same time, defense, subsidies, centrally sponsored schemes and other expenses are around 8 to 9 percent as per last year’s budget.
- The budget document presented last year shows that the government spends the least amount on pension distribution.
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