Read the following text carefully: The government has allocated ₹ 16.27 lakh crore for major sectors, ranging from defence to rural development to social welfare to commerce and so on. Government expenditure goes to paying states' share of taxes and duties. Around 19% is spent on interest payments and 16% on central sector schemes, with subsidies, pension and other payments contributing 19%. Government revenue is divided between borrowings and other liabilities, which account for massive 27% of the incoming cash. Income tax revenue of around 19%; Goods and Services Taxes (GST) and other taxes of around 18%; Corporation taxes account for around 17%. The next highest provision on this list is ₹ 2.66 lakh crore for rural development. This will include expenditure on rural infrastructure projects and increased outlay for the popular MGNREGA scheme. On the basis of given text and common understanding, answer the following questions:
[(i)] Identify the major sources of government revenue and state what percentage does each one of them contribute.
[(ii)] Discuss the need for allocating funds among different sectors of the economy.
Step 1: Understanding the Concept:
Government revenue (Receipts) is categorized into Revenue Receipts (Tax and Non-tax) and Capital Receipts (like Borrowings). Step 2: Detailed Explanation:
According to the provided text, the sources of revenue and their contributions are:
1. Borrowings and other liabilities: 27% (This is the largest source).
2. Income Tax: 19%.
3. Goods and Services Tax (GST) and other taxes: 18%.
4. Corporation Tax: 17%. Step 3: Final Answer:
The major sources are Borrowings (27%), Income Tax (19%), GST (18%), and Corporation Tax (17%). B Step 1: Understanding the Concept:
Resource allocation is a primary objective of the government budget to ensure social and economic stability. Step 2: Detailed Explanation:
The need for allocating funds among different sectors arises due to the following:
1. Reallocation of Resources: The government directs resources towards socially useful sectors (like rural development and MGNREGA mentioned in the text) through subsidies or direct spending.
2. Reducing Inequalities: Funds for social welfare help in bridging the gap between the rich and the poor.
3. Balanced Regional Development: By allocating 2.66 lakh crore to rural development, the government ensures that infrastructure is built in backward areas, preventing concentration of wealth in cities.
4. National Security: Allocation for defence is crucial for the sovereignty of the nation. Step 3: Final Answer:
Funds are allocated to ensure social welfare, regional balance, and economic growth.
