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A. Trends in Revenue Budget ↓
- Revenue Receipts : They consist of tax and non tax revenue. Revenue receipts have increased from Rs. 54,954 crores in GDP in 1990-91 to Rs. 3,43,833 crores in 2005-06. Revenue receipts were 9.7% of GDP in 1990-91 and 9.6% in 2005-06. The share of tax revenue in the total revenue receipts was 81% in 2006-07.
- Tax Measures and Reforms : Reforms of the tax structure have been an important part of the structural reforms introduced through the budgets since 1991-92. The strategy was to move towards a simpler system of taxation with moderate rates, fewer exemptions and wider tax base. These principles are being implemented in case of both direct and indirect taxes. All major direct and indirect tax rates have been reduced. In 2006-07, the government raised Rs. 3,27,205 crores in tax revenue as compared to Rs. 42,978 crores in 1990-91.
- Revenue Expenditure : Revenue expenditure has been increasing continuously. It has increased from Rs. 73,516 crores in 1990-91 to Rs. 4,38,252 crores in 2005-06. As proportion of GDP, revenue expenditure was 12.9% in 1990-91 and 12.3% in 2005-06. Defence expenditure increased from Rs. 10,874 crores in 1990-91 to Rs. 51,542 crores in 200607. Interest payments constituted the largest proportion of revenue expenditure. In 1990-91, it was Rs. 21,500 crores and in 2006-07 it stood at Rs. 1,39,823 crores. In line with the policy of the government reduce subsidies by targeting them in favour of the poor and the needy, total subsidies as percentage of GDP has declined from 1.8% in 1990-91 to 1.2% in 2005-06.
B. Trends in Capital Budget ↓
Capital budget consists of capital receipts and capital expenditures. in capital receipts borrowings from the market, external loans, small savings, provident funds and the deposits from LIC and GIC accounted for 76% of the total capital receipts in 1990-91. In 1999-2000 this went up to 90%. Over the years there has been substantial increase in the borrowings by the center.
Capital expenditure consists of capital investments, public debt repayment and loans and advances to the states for financing projects. Capital expenditure is by and large financed by borrowing from internal sources. The share of capital expenditure to total expenditure was 35% in 1980-81 and 22% in 1999-2000.
C. Trends in Plan and Non-Plan Expenditure ↓
Non plan expenditure of the central government comprise of interest payments, defence, subsidies and non plan grants and loans to states.
For many years the growth of non plan expenditure has been faster than the growth of plan expenditure. Non plan expenditure increased by 5.3 times between 1980-81 and 1990-91, while plan expenditure increased by 3 times in the same period.
However, with the introduction of reforms this trend has been reversed. In the first two years of reforms process, the increase in non plan expenditure was only 11.7% against an increase of 29.2% in plan expenditure.