Q.7 Examine the role of non-tax revenue in India’s fiscal framework. How can it be strengthened?
Ans: Non-tax revenue (NTR) is a critical component of India’s fiscal framework, comprising income from sources like dividends, interest, fees, and public sector enterprises. It complements tax revenue, ensuring fiscal stability and funding public services.
Role and Strengthening of Non-Tax Revenue
- NTR contributes significantly to government finances, reducing reliance on borrowings.
- Key sources include profits from PSUs, spectrum auctions, and user charges.
- Strengthening NTR requires improving PSU efficiency, expanding monetization of public assets, and rationalizing user charges.
- Initiatives like the National Monetization Pipeline (NMP) and disinvestment can enhance NTR. Transparency and accountability in revenue collection are also vital.
By optimizing NTR sources, India can achieve fiscal consolidation, reduce deficits, and fund developmental goals effectively.
| Source : Budget |
| Extra Info : Non tax revenue is income that the government earns from sources other than through taxes. This includes earnings from dividends from investments in public sector undertakings (PSUs), interest on loans and fees for various services provided. Non tax revenues offer a steady and reliable income stream, helping cover the cost of government services and adding to the government’s overall revenue. Components of Non Tax Revenue InterestExamination FeesPetroleum LicencePower Supply FeesCommunication Services FeesDividends and Profits Difference Between Tax Revenue and Non Tax Revenue Tax revenue comes from the income earned by individuals or entities and the value of goods and services sold or bought. You must pay a portion of your income and the value of goods or services as tax.Non-tax revenue is charged for services provided by the government. You only pay non-tax revenue when you use these government services. |