Types of Receipts and Expenditure

3.1 Revenue Receipts

Tax Revenue (Central Taxes):

• Direct Taxes: Income Tax (salary, business, corporate, capital gains), Corporation Tax, Wealth Tax (abolished 2015)
• Indirect Taxes: GST (Central share + IGST); Customs Duty; Central Excise (on petroleum products, tobacco — outside GST); Securities Transaction Tax

Key figures for Budget 2025-26:

• Gross Tax Revenue: Rs 42.70 lakh crore (after devolution, Centre retains Rs 28.37 lakh crore as net tax revenue)
• Income Tax: Rs 13.40 lakh crore (largest direct tax)
• Central GST + IGST settlement: Rs 10.62 lakh crore (central share)
• Customs: Rs 2.20 lakh crore; Union Excise: Rs 3.00 lakh crore

Non-Tax Revenue:

• Dividends from CPSEs (Central Public Sector Enterprises) and RBI
• Interest received on loans given to states/PSUs
• User fees from government services
• Grants from abroad
• Budget 2025-26 non-tax revenue: Rs 5.00 lakh crore, including RBI dividend of Rs 2.11 lakh crore (record)

3.2 Capital Receipts

• Market Borrowings: Government Securities (G-Secs) and Treasury Bills issued to borrow from financial markets — the primary financing source for fiscal deficit
• Small Savings: PPF, NSC, Sukanya Samriddhi — households lending to government via post offices
• Disinvestment: Sale of government equity in PSEs. Budget 2025-26 target: Rs 47,000 crore
• Recovery of Loans: Repayment by states of central loans
• External Borrowings: IMF, World Bank, Asian Development Bank loans

3.3 Revenue Expenditure

Revenue expenditure creates no capital asset — it is consumed in the year of spending. Key components:

Category	Budget 2025-26 (Rs lakh crore)	% of Total Revex
Interest Payments	11.54	31.1%
Subsidies (food, fertiliser, LPG)	4.54	12.2%
Salaries & Wages	5.28	14.2%
Pensions (civil + defence)	2.47	6.7%
Grants to States	4.20	11.3%
Defence Revenue	3.38	9.1%
Others	5.68	15.3%
Total Revenue Expenditure	37.09	100%

Interest payments alone consume Rs 11.54 lakh crore — more than the entire capital expenditure budget. This is the "interest burden" constraining India's fiscal space.

3.4 Capital Expenditure

Capital expenditure creates productive assets and has a higher fiscal multiplier:

• Infrastructure spending: Roads (PMGSY, NH), Railways, Ports, Airports
• Defence Capital: Weapon systems, ships, aircraft procurement
• Interest-Free Loans to States for Capex: Rs 1.50 lakh crore in 2025-26
• Total Capex (2025-26 BE): Rs 11.21 lakh crore (3.1% of GDP)

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