Budget 2019: Where Does India’s Revenue Come From?

With less than 2 days left for Budget 2019, it is imperative to understand India’s revenue system. India’s economy is said to be the 10th richest in the world with the Government earning $15,000 billion, every year. That is a lot of money. And despite that our economy is in a massive deficit with our expenses far exceeding the revenue. Why is that and how does the budget aim to fix it? Here’s a quick rundown on the government’s income receipts.


Did you know that the Government earns most of its money through the taxes we pay?

  • Income Tax – The tex the individual and business pay from their annual salaries or profits
  • Value Added Tax – Money earned from customs and excise duties on imported goods.
  • Cess and Surcharge – A tax collected to spend on educational improvement in India.
  • GST – The Goods and Services Tax was a consolidated tax policy introduced in 2017 that was supposed to replace service tax and other charges on products. The GST is an indirect tax levied on the supply of goods and services.

Non-tax Revenue

Non-tax revenue is earned from tolls, interests on loans, bonds and profits made by PPPs and government-owned companies.


The money the government earns from the global sale of goods and commodities. Currently, India’s export bill is much less than its import bill resulting in a deficit economy.

Where is the amount earned spent?

The tax which is collect directly is spent on subsidies, internal security, law and order, and other human development activities. Indirect taxes, on the other hand, pay for pensions and salaries, and investments in different sectors. Besides this, India also spends a lot of its income on importing goods from other nations, paying interest on external loans and providing resources or monetary aid to the UN and poor/unstable nations.

So now that you have a good brief on our income and expense system, you will be a better judge of Budget 2019.

Budget 2019: Where Does India’s Revenue Come From? was last modified: by
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