ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The government of India earns income via imposing several forms of taxes such as taxes on incomes of individuals and corporates, GST on goods and services and property tax. It also earns revenue through non-tax sources such as interest on loans given by it to entities such as states and Railways.

Detailed explanation-2: -Taxes are used by the government for carrying out various welfare schemes including employment programmes. There are Lakhs of employees in various departments and the administrative cost has to be borne by the Government.

Detailed explanation-3: -Given below is the structure of the earnings of the government: Based on the FY22 budget document, a major portion of India’s Re 1 earnings primarily is generated from borrowings and other liabilities followed by Goods and Service Tax (GST), corporate tax and income tax.

Detailed explanation-4: -The major sources of revenue for the Indian government are the GST and income tax. Both sources of taxation account for roughly 90 per cent of the government’s overall revenue. GST contributed about 57 per cent of overall tax revenue in 2021-22.

Detailed explanation-5: -The tax structure in India is divided into direct and indirect taxes. While direct taxes are levied on taxable income earned by individuals and corporate entities, the burden to deposit taxes is on the assessees themselves.