UNION GOVERNMENT BUDGET 2008-09

Father and mother of poorer section of the society

BEERAIAH.D
LECTURER IN COMMERCE
GOVERNEMTN COLLEGE FOR
WOMEN MADDUR.
Objective of Public Finance

1. Distributing the Government Revenue

Revenue of Government can be distributed towards the Agricultural

activities. Industrial sectors and service sector according to the needs of
these sector.

2. Equal distribution of wealth/Assets.

Inequality in terms of Income and wealth can be reduced is possible

by collecting more tax from higher class of the society and benefited to
lower section.

3. To maintain stability

The government can maintain stable in terms and employment, price

level of goods and services and favorable economic development.

Union Government Budget for 2008-09

Government revenue Rs. In crores

I. Revenue Account
602935
a. Tax revenue 507150
b. other than Tax 95785
II. Capital Account
a. Loan Collection 4497
b. other Income 10165
c. Loan 133287 147949

TOTAL REVENUE 750884

I. Revenue Account:

Revenue A/c Means collect the revenue from the Government own
Sources. It includes Tax revenue and other than Tax revenue.

1. Tax revenue.
Govt. collect Tax revenue in this year is Rs.507150 crores. Tax
revenue can be collected by 2 ways they are

a) Direct Tax
b) Indirect Tax

Direct Tax can be collected from people who having more Income,
profit, and wealth/asset. In this year govt. seems to collect the Direct Tax
is Rs.207931.5 crores. It is less than 41% of Total Tax revenue.

Indirect Tax can be collected from all citizens of India irrespective

of level of Income i.e., Indirect Tax can be payable all Indians by way of
purchasing goods and services which are necessary to life such as
purchase of food items, cloths, home construction items, Books,
notebook, pens, medicines etc.

In world, more countries collect more revenue through Direct Tax

and less revenue from Indirect Tax but In India, more revenue can be
(more than 59%) collected through Indirect Tax and less revenue from
Direct Tax (less than 41%)

Other than tax

It including central govt. subsidy’s, Income from postal dept.

railway dept, public undertaking etc In this year govt. planning to collect
Rs.95785 crores.

II. Capital Account.

a. collection of Loan

It Including in this year Rs.4497 crores

 b. Other Income

From this source govt. seems to collect in this year is Rs.10165 crores.

c. Loan Raising
If the govt. expenditure exceeds the Income. Necessary to raise the
loan. In this year they were raising Rs.1,33287 crores. Whether it is
necessary to raising this huge amount or not can be understood by analyzing
other countries tax policies.

Tax rates on their GDP

Countries 2005 2006

India 9.9 8.6
Indonesia 17.8 15.6
Koriya ® 15.9 17.3
Philipines 14.9 17.0
Tailand 17.1 14.4
Srilanka 19.0 14.5
Pakistana 13.3 12.6
Southaffrica 24.3 24.5

There fore no need to raise further loan if the govt. collect tax from higher
classes of the society and Rs. 38000 crores Tax evation is also there in this
year. India is 9th countries and of 15 countires which are raise more debt.

Public expenditure

Particulars Amount in crores Rs. %

Interest 190807 25.41%
Deference 105600 17.06%
Subsidy’s 32667 4.35
Other expenditure 178424 23.77%
Planning expenditure 243386 32.4%
750884 100%
1. Interest

It is not benefits to lower classes of the society because no one is

able to give any loan to govt. from lower classes of the society.

2. Defence

Some of this money in wasted through middlemen and some scandals

such on boparsh, sava pottige, thehalka, com etc.

a) Food subsidy : In this year food subsidy is Rs. 17942 crores. This money
govt. give subsidys in 2 ways. They are

b) subsidies : It includes 3 majar subsidy . They are .

1. subsidy to ration dept.

2. supporting price to farmers.

b) Fertilizer subsidy.
In this year fertilizer subsidy is Rs.10847 crores.

c) Petrolium Subsidy.
It is subsidy to LPG cilendar and carocine subsidy. In thisyear
subsidy is Rs. 2884. crores

4) Other expenditure

It Includes Rs.178424 Crores. This amount is used for salary to all

govt. employees.

5) Planning expenditure:

The planning expenditure in this year is Rs.243386 this amount is

used for economic development of the country. This expenditure includes
dept. like, agriculture, rural development, irrigation, industries, and service
sectors.
Planning expenditure = 243386 crores ) 32%)
Non-Planning expendure = 507498 crores (68%)

Education policy: other countries govts. Spend more than 6% on their GDP.
But in India it is only 3% this major amount goes to IIM, IIS, ITT, Indian
Law School, medical, Technical research center etc.

Health Policy

Other countries spend more than 4% on their GDP but Govt. of India
seems to spend only 0.6%

Conclussion:

“If you give me a fish I will eat for a day, but

If you teach me to catch the fish I will eat for ever”.