Public Revenue: Sources and Growth

The government looks at the revenue system as a means towards accomplishing one or more objectives and setting certain criteria or principles as guidelines for developing the revenue system. In common parlance, practice is applied to part of the theory which in turn develops out of practice. Growth process of an economy is highly multifaceted in nature and in the process; a few growth-oriented institutions improve, while the economy faces the challenges in energizing some other. In this process, upholding closeness between theory and practice is not an easy task. This paper focuses on what the theory says about the public revenue and what is in practice, and sources of public revenue and their growth at the central as well as State governments in the Indian context. The gap between theory and practice is quite evident. Realizing the fact that Indian tax system is cumbersome, the central government has initiated reforms in the revenue front which in turn has reflected in the revenue growth. Likewise, the State governments also pursued the reforms and executed several measures in consonance with the central government and achieved the outcomes too. However, much is to be done with regard to cannon of efficiency. This is only revenue side of the fiscal policy.