Where does the government get so much money from?
Budget 2021: The country’s general budget is going to be presented on 1 February 2021. In every budget, many announcements are made for different sectors of the country, for which a fixed amount of money is announced. Apart from this, there is also a budget allocation for various ministries and departments, which they use in various expenses / schemes throughout the financial year.
Listening to the allocation for various schemes and ministries in the budget, this question often comes to mind that from where does the government get so much money. This time this question is even more legitimate because this time the Indian economy is facing the shock of COVID 19 and the government has already made several announcements to give relief from the effects of the epidemic. In such a situation, where is the government going to raise the budget?
This is how the government gets money
- Borrowings & Other Liabilities
- Non-debt capital receipts
- Non-Tax Revenue
- Corporate tax
- Income Tax
- Central excise
- Custom duty
- Goods and Services Tax (GST)
The major sources of raising money for the budget for the financial year 2021-22 can prove to be tax collection, borrowings and disinvestment of various public sector companies. Apart from this, the government can also raise money by increasing the import duty on some things to promote domestic production.
Where do you usually spend
- States’ share in taxes and duties
- Central sector schemes
- Centrally sponsored schemes
- Interest payment
- Subsidies
- Finance Commission and other transfers
- Defence
- Pension
- Other expenses
Finance Minister Nirmala Sitharaman has said that the government wants to control the economy affected by the epidemic and promote growth. Therefore, the budget will also be centered in this direction. In the kind of situation at this time, there is a need to increase the expenditure from the government and there is no need to be worried about the fiscal deficit. She has also said that the emphasis on public spending for infrastructure will continue. It would be important to develop better skills for health, medical research and development (R&D) and telemedicine. At the same time, along with this, the challenges of employment will have to be seen from a new perspective, with which a new perspective on vocational training and skill development will be necessary.
For revival of growth, support will be given to those areas in which the COVID-19 epidemic has severely stalled. With this, those areas which are now being the center of new demand and new engines of growth. It is expected that the government will also focus on improving the cold chain infrastructure. There may be more allocation for the health sector, including expenditure on COVID 19 vaccination and strengthening of the health sector infrastructure.
