| Question | 4. What is the meaning of revenue receipts? What are the two main sources of revenue receipts? |
| Class | Class 12 |
| Subject | Economics (Macroeconomics) |
| Category | Class 12 Economics Solutions Sandeep Garg |
Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Long Questions – Q.4 What is the meaning of revenue receipts? What are the two main sources of revenue receipts?
Solution:
Revenue receipts are those recurring receipts for the Government which neither results in reduction of its assets nor an increase in its liabilities. The two main sources of revenue receipts are:-
- Tax revenue: – Tax is a compulsory payment to the Government imposed on citizens and corporates of a country by Law, in order for the Government to meet its expenditures. Two kinds of tax revenues are: –
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- Direct tax revenue: – Direct Taxes are those taxes which are levied on and the burden to pay is on the same person or corporate. The Burden to pay a direct tax cannot be shifted on another person. Examples of Direct taxes are Income Tax, Corporate Tax, Wealth Tax etc.
- Indirect Tax revenue: – Indirect taxes are those revenue receipts for the government in which burden to pay can be shifted. In other words, the person on whom tax is levied and the person who ultimately bears the brunt of tax are different. Example, GST and excise duty.
- Non-Tax revenue: – Non-Tax revenue refers to those revenue receipts of the government which is not a part of its tax receipts. For example: – Interest Received by the government, Fines etc.
Long Questions – Sandeep Garg Macroeconomics Class 12 Solutions Government budget and the Economy
- Define Government budget. Explain the various objectives of a government budget.
- What is meant by non-tax revenue? Explain the different sources of non-tax revenue
- What is meant by budget expenditure? Distinguish between revenue expenditure and capital expenditure.
- What is the meaning of revenue receipts? What are the two main sources of revenue receipts?
- Discuss the meaning of following deficits: (i) Revenue Deficit; (ii) Fiscal Deficit; and (iii) Primary Deficit.
- Distinguish between: (a) Direct Tax and Indirect tax (b) Primary deficit and Revenue deficit
- Distinguish between the following (a) Revenue receipts and Capital receipts (b) Revenue deficit and Fiscal deficit