Public Finance: Budgets, Taxes and non-tax revenues, Budget deficits.

Public Finance – ప్రభుత్వ విత్తం అనేది Economicsలో ఒక ముఖ్యమైన శాఖ. ప్రభుత్వం ఆదాయాన్ని ఎలా సమీకరిస్తుంది, ఆ ఆదాయాన్ని ఎలా ఖర్చు చేస్తుంది, అవసరమైనప్పుడు ఎలా అప్పు చేస్తుంది మరియు ఈ ఆర్థిక కార్యకలాపాలు సమాజం, ఉత్పత్తి, ఉపాధి, ధరల స్థాయి మరియు సంక్షేమంపై ఎలాంటి ప్రభావం చూపుతాయో Public Finance అధ్యయనం చేస్తుంది.

Core Exam Definition:

Public Finance deals with the income and expenditure of public authorities.

Public authoritiesలో Central Government, State Governments మరియు Local Bodies వస్తాయి.

Public Finance – ముఖ్య నిర్వచనాలు

Hugh Dalton:

Public Finance is concerned with the income and expenditure of public authorities and with their adjustment to one another.

Adam Smith:

Public Finance is an investigation into the nature and principles of State Revenue and Expenditure.

Memory:

Adam Smith → State Revenue & Expenditure

Hugh Dalton → Public Income + Public Expenditure + Adjustment

Why is Public Finance Important?

Modern Government కేవలం law and order నిర్వహించే సంస్థ మాత్రమే కాదు. ఇది Welfare Stateగా అనేక ఆర్థిక మరియు సామాజిక బాధ్యతలను నిర్వహిస్తుంది.

Government spends money on:

✓ Education
✓ Public Health
✓ Roads and Infrastructure
✓ Social Welfare
✓ Defence
✓ Economic Development
✓ Public Services
✓ Disaster Management

ఈ కార్యకలాపాల వల్ల economyలో income, output, employment మరియు general price level ప్రభావితమవుతాయి.

Structure of Public Finance

PUBLIC FINANCE

↓

I. Public Expenditure

II. Public Revenue

III. Public Debt

IV. Fiscal Policy

V. Financial Administration

Five Components – Must Remember:

Public Expenditure → Public Revenue → Public Debt → Fiscal Policy → Financial Administration

I. Public Expenditure – ప్రభుత్వ వ్యయం

Government లేదా public authorities వివిధ economic and social activities కోసం చేసే expenditureను Public Expenditure అంటారు.

Simple Meaning:

Expenditure incurred by public authorities = Public Expenditure

Classification of Public Expenditure

Public expenditureను ప్రధానంగా:

1. Revenue Expenditure
2. Capital Expenditure
3. Developmental Expenditure
4. Non-Developmental Expenditure

Revenue Expenditure

Government యొక్క regular/current activitiesకు సంబంధించిన expenditure.

Examples include salaries, interest payments, pensions, subsidies and similar current expenditures.

Capital Expenditure

Assets creation లేదా long-term development activitiesకు సంబంధించిన government expenditure.

Examples:

Roads
Bridges
Buildings
Development Projects

Growth of Public Expenditure

Modern welfare statesలో Public Expenditure నిరంతరం పెరగడానికి అనేక కారణాలు ఉన్నాయి.

Major Reasons:

1. Expansion of Government Activities

2. Rapid Increase in Population

3. Growing Urbanization

4. Increasing Defence Expenditure

5. Spread of Democracy

6. Inflation

7. Industrial Development

8. Disaster Management

Memory:

Welfare State ↑ → Government Functions ↑ → Public Expenditure ↑

1. Expansion of Government Activities

Education, health, public works, recreation, welfare schemes వంటి functions పెరగడం వల్ల government expenditure పెరుగుతుంది.

2. Population Growth

Population పెరిగినప్పుడు education, health, transport, housing, sanitation మరియు ఇతర public servicesపై expenditure కూడా పెరుగుతుంది.

3. Urbanization

Urbanization పెరిగినప్పుడు water supply, roads, electricity, schools, public transport మరియు sanitationపై government expenditure పెరుగుతుంది.

4. Defence

National security మరియు defence requirements కారణంగా government expenditure పెరుగుతుంది.

5. Democracy

Elections మరియు democratic administrative activities కూడా public expenditureకు దోహదం చేస్తాయి.

6. Inflation

Government కొనుగోలు చేసే goods and services ధరలు పెరిగినప్పుడు అదే services అందించడానికి ఎక్కువ expenditure అవసరమవుతుంది.

7. Industrial Development

Industrial development కోసం infrastructure, schemes మరియు programmesపై government expenditure పెరుగుతుంది.

8. Disaster Management

Floods, cyclones, earthquakes మరియు ఇతర disasters సమయంలో relief, rehabilitation మరియు reconstruction కోసం expenditure పెరుగుతుంది.

II. Public Revenue – ప్రభుత్వ ఆదాయం

Government వివిధ sources ద్వారా సమీకరించే aggregate incomeను Public Revenue అంటారు.

PUBLIC REVENUE

↓

A. Tax Revenue

B. Non-Tax Revenue

Most Important Classification:

Public Revenue → Tax Revenue + Non-Tax Revenue

A. Tax Revenue

Governmentకు taxes ద్వారా లభించే revenueను Tax Revenue అంటారు.

Prof. Seligman:

Tax is a compulsory contribution to Government without reference to special benefits conferred.

Characteristics of a Tax

1. Tax is a compulsory contribution.

2. It is an important source of Government revenue.

3. It is paid for meeting expenditure in the common interest of society.

4. Taxpayer does not receive a direct and proportionate benefit in return.

5. Tax may be imposed on income, property, goods or services.

Canons of Taxation – Adam Smith

Adam Smith proposed four famous principles or Canons of Taxation.

Equity / Equality

Certainty

Convenience

Economy

Memory Trick:

E – C – C – E

Equity → Certainty → Convenience → Economy

1. Canon of Equity / Equality

Tax burden taxpayer యొక్క ability to payకు అనుగుణంగా ఉండాలి.

2. Canon of Certainty

Taxpayer ఎంత tax చెల్లించాలి, ఎప్పుడు చెల్లించాలి, ఎలా చెల్లించాలి అనే విషయాలు స్పష్టంగా ఉండాలి.

3. Canon of Convenience

Tax payment taxpayerకు convenientగా ఉండే విధంగా మరియు సమయంలో levy చేయాలి.

4. Canon of Economy

Tax collection cost సాధ్యమైనంత తక్కువగా ఉండాలి.

Types of Taxes

TAXES

↓

Direct Taxes

Indirect Taxes

Direct Tax

Direct taxలో tax burden ఎవరిపై levy చేయబడుతుందో సాధారణంగా అదే వ్యక్తి భరిస్తాడు; burdenను మరొకరికి shift చేయలేడు.

Impact = Incidence

Key Example: Personal Income Tax

Indirect Tax

Indirect taxలో tax burdenను taxpayer ఇతరులకు shift చేయగలడు.

Impact ≠ Incidence

Important Example: GST

Direct Tax vs Indirect Tax

Direct Tax	Indirect Tax
Burden normally cannot be shifted	Burden can be shifted
Impact and incidence on same person	Impact and incidence may fall on different persons
Generally imposed directly on income/person	Generally imposed on supply/transactions in goods and services
Example: Income Tax	Example: GST

Taxes According to Rate Structure

1. Proportional Tax
2. Progressive Tax
3. Regressive Tax

Proportional Tax

Income ఎంత ఉన్నా same tax rate వర్తిస్తే proportional tax.

Income ↑ → Tax Amount ↑
But Tax Rate → Constant

Progressive Tax

Income పెరిగే కొద్దీ applicable tax rate పెరిగే structureను progressive taxation అంటారు.

Income ↑ → Tax Rate ↑

Regressive Tax

Income పెరిగే కొద్దీ tax burden incomeలో తీసుకునే proportion తగ్గే tax structureను regressive taxation అంటారు.

Income ↑ → Effective Tax Burden as proportion of income ↓

B. Non-Tax Revenue – పన్నేతర ఆదాయం

Taxes కాకుండా Government administration, public services, public enterprises, fees, fines, grants మొదలైన sources ద్వారా Governmentకు వచ్చే incomeను Non-Tax Revenue అంటారు.

Uploaded material identifies the following important sources:

1. Fees
2. Prices of Public Goods and Services
3. Special Assessment
4. Fines and Penalties
5. Gifts, Grants and Donations
6. Special Levies
7. Borrowings

1. Fees

Government ఒక specific service అందించినందుకు తీసుకునే paymentను fee అంటారు.

Examples → Registration Fee, Education-related Fee

Tax vs Fee:

Tax → Direct quid pro quo అవసరం లేదు.

Fee → Specific serviceకు సంబంధించిన payment.

2. Prices of Public Goods and Services

Government citizensకు goods/services అందించి తీసుకునే payment.

Examples → Railway fares, Postal charges

3. Special Assessment

ఒక particular localityకు special facilities కల్పించినప్పుడు ఆ ప్రాంతంలోని beneficiaries నుంచి తీసుకునే special paymentను Special Assessment అంటారు.

Example → Special roads, water supply or other local facilities.

4. Fines and Penalties

Lawsను violate చేసిన వారిపై Government fines and penalties విధిస్తుంది. వీటి primary objective revenue earning కాకుండా law violationsను discourage చేయడం.

5. Gifts, Grants and Donations

Government citizens, institutions లేదా other governments నుంచి gifts, grants and donations పొందవచ్చు.

6. Special Levies

Harmful commodities consumptionను discourage చేయడానికి special levies విధించవచ్చు.

7. Borrowings

Government people, institutions లేదా external organizations నుంచి loans తీసుకోవచ్చు.

Exam Sequence:

Fees → Prices → Special Assessment → Fines → Gifts/Grants → Special Levies → Borrowings

III. Public Debt – ప్రభుత్వ రుణం

Government expenditure revenue కంటే ఎక్కువగా ఉన్నప్పుడు Government loans raise చేయవచ్చు. Government యొక్క total borrowingsను broadly Public Debt contextలో study చేస్తారు.

PUBLIC DEBT

↓

Internal Debt

External Debt

Internal Debt

Government దేశం లోపల citizens, banks, financial institutions మొదలైన sources నుంచి borrow చేస్తే Internal Debt.

External Debt

Government foreign governments, foreign institutions లేదా international organizations నుంచి borrow చేస్తే External Debt.

Internal Debt	External Debt
Raised within the economy	Raised outside the economy
Domestic sources	Foreign sources/institutions
Normally associated with domestic currency obligations	May involve foreign-currency obligations
Relatively less complex	Generally more complex

IV. Fiscal Policy – కోశ విధానం

Government తన spending levels మరియు tax ratesను మార్చడం ద్వారా economyను influence చేసే policyను Fiscal Policy అంటారు.

Fiscal Policy deals principally with:

✓ Public Expenditure
✓ Public Revenue / Taxation
✓ Public Debt

Very Important:

Fiscal Policy → Government

Monetary Policy → Central Bank / RBI

V. Financial Administration

Government యొక్క revenue, expenditure మరియు debt policiesను smooth and efficient mannerలో implement చేయడాన్ని Financial Administration అంటారు.

It includes:

Revenue Administration
Expenditure Administration
Debt Management
Budget Preparation
Budget Implementation

Public Finance vs Private Finance

Basis	Public Finance	Private Finance
Objective	Maximum social advantage	Private interest/satisfaction
Expenditure	Government determines public needs and expenditure	Individual considers income before expenditure
Credit Status	Generally higher borrowing capacity	Limited borrowing capacity
Currency Authority	State has sovereign monetary authority under law	Individual has no such authority
Elasticity	Relatively more elastic	Relatively limited
Economic Effect	Large economy-wide effect	Usually limited individual effect

Government Budget – Introduction

Budget is an important instrument of Financial Administration. It shows Government యొక్క expected receipts and proposed expenditure for a financial year.

India's Financial Year:

1 April → 31 March

Article 112 of the Constitution of India → Annual Financial Statement

Exam Trap:

The Constitution uses the expression Annual Financial Statement.

Revenue Budget and Capital Budget

GOVERNMENT BUDGET

↓

Revenue Budget

Capital Budget

Revenue Budget

Revenue Budget consists of:

Revenue Receipts
+
Revenue Expenditure

Revenue Receiptsలో Tax Revenue మరియు Non-Tax Revenue ఉంటాయి.

Capital Budget

Capital Budget consists of:

Capital Receipts
+
Capital Expenditure / Payments

Capital receiptsలో borrowings, recovery of loans, disinvestment వంటి items ఉండవచ్చు. Capital expenditureలో asset creation మరియు development projects వంటి expenditure ఉంటుంది.

Types of Government Budget

1. Balanced Budget
2. Surplus Budget
3. Deficit Budget

Balanced Budget

Estimated Government Receipts మరియు Estimated Government Expenditure equalగా ఉంటే Balanced Budget.

Government Receipts = Government Expenditure

Classical economists such as Adam Smith balanced budgetకు importance ఇచ్చారు.

Surplus Budget

Government Receipts expenditure కంటే ఎక్కువగా ఉంటే Surplus Budget.

Government Receipts > Government Expenditure

Textbook treatment ప్రకారం inflationary conditionsలో aggregate demandను moderate చేయడానికి surplus budget ఉపయోగపడవచ్చు.

Deficit Budget

Government expenditure receipts కంటే ఎక్కువగా ఉంటే Deficit Budget.

Government Receipts < Government Expenditure

Textbook treatment ప్రకారం depression/recessionary conditionsలో Government expenditure పెంచడం ద్వారా employment మరియు aggregate demandను support చేయడానికి deficit budget ఉపయోగపడవచ్చు.

Most Important Exam Points

1. Public Finance → Income and expenditure of public authorities.

2. Public Finance is a branch of Economics.

3. Main structure → Expenditure, Revenue, Debt, Fiscal Policy, Financial Administration.

4. Public Revenue → Tax + Non-Tax Revenue.

5. Taxes → Direct + Indirect.

6. Direct Tax → burden normally cannot be shifted.

7. Indirect Tax → burden can be shifted.

8. Adam Smith → Four Canons of Taxation.

9. E-C-C-E → Equity, Certainty, Convenience, Economy.

10. Direct tax rate structures → Proportional, Progressive, Regressive.

11. Public Debt → Internal + External.

12. Fiscal Policy → Government spending, revenue/taxation and debt policy.

13. Budget → Expected receipts + proposed expenditure.

14. Financial Year → 1 April to 31 March.

15. Article 112 → Annual Financial Statement.

16. Budget → Revenue Budget + Capital Budget.

17. Balanced → R = E.

18. Surplus → R > E.

19. Deficit → R < E.

Exam-Oriented MCQs

1. Public Finance deals primarily with:

A) Household finance
B) Income and expenditure of public authorities
C) Company accounts only
D) Stock market only

సమాధానం: B

2. Public Finance is a branch of:

A) Economics
B) Physics
C) Biology
D) Chemistry

సమాధానం: A

3. Which economist defined Public Finance in terms of income and expenditure of public authorities?

A) Hugh Dalton
B) Marshall
C) Fisher
D) Ricardo

సమాధానం: A

4. Public Revenue is broadly classified into:

A) Tax and Non-Tax Revenue
B) Saving and Investment
C) Demand and Supply
D) Imports and Exports

సమాధానం: A

5. Expenditure incurred by public authorities is called:

A) Private Expenditure
B) Public Expenditure
C) Investment only
D) Consumption only

సమాధానం: B

6. Which is NOT one of the major components of Public Finance in the textbook structure?

A) Public Revenue
B) Public Expenditure
C) Public Debt
D) Consumer Utility

సమాధానం: D

7. Public Revenue mainly arises because Government has:

A) Public Expenditure
B) Zero expenditure
C) No functions
D) No citizens

సమాధానం: A

8. Which is a Tax Revenue source?

A) Income Tax
B) Gift to Government
C) Fine
D) Fee

సమాధానం: A

9. Tax is generally a:

A) Voluntary gift
B) Compulsory contribution
C) Bank loan
D) Donation only

సమాధానం: B

10. A taxpayer is entitled to a direct proportional service in return for every tax paid:

A) True
B) False

సమాధానం: B) False

Taxation MCQs

11. Canons of Taxation are associated with:

A) Adam Smith
B) Keynes
C) Fisher
D) Schumpeter

సమాధానం: A

12. Which is NOT one of Adam Smith's four canons?

A) Equity
B) Certainty
C) Convenience
D) Inflation

సమాధానం: D

13. Tax should be related to ability to pay. This is:

A) Canon of Equity
B) Certainty
C) Convenience
D) Economy

సమాధానం: A

14. Taxpayer should know how much and when to pay. This is:

A) Certainty
B) Equity
C) Economy
D) Productivity

సమాధానం: A

15. Tax should be collected at a convenient time. This is:

A) Convenience
B) Certainty
C) Equity
D) Neutrality

సమాధానం: A

16. Minimum collection cost refers to:

A) Canon of Economy
B) Equity
C) Convenience
D) Certainty

సమాధానం: A

17. In a Direct Tax:

A) Burden is normally not transferable
B) Burden must always be transferred
C) There is no taxpayer
D) Government receives no revenue

సమాధానం: A

18. Which is an example of Direct Tax?

A) Income Tax
B) GST
C) Customs duty
D) Sales tax

సమాధానం: A

19. GST is primarily classified as:

A) Direct Tax
B) Indirect Tax
C) Public Debt
D) Fee

సమాధానం: B

20. In an indirect tax:

A) Burden can be shifted
B) Burden can never be shifted
C) Tax is voluntary
D) It is always a gift

సమాధానం: A

Tax Rate MCQs

21. Same tax rate at all income levels is:

A) Proportional
B) Progressive
C) Regressive
D) Indirect

సమాధానం: A

22. Tax rate increases with income under:

A) Progressive Tax
B) Proportional Tax
C) Regressive Tax
D) Fee

సమాధానం: A

23. Tax burden as a proportion of income falls as income rises under:

A) Regressive Tax
B) Progressive Tax
C) Proportional Tax
D) GST only

సమాధానం: A

Non-Tax Revenue MCQs

24. Which is a Non-Tax Revenue source?

A) Fees
B) Income Tax
C) Corporation Tax
D) Direct Tax only

సమాధానం: A

25. Registration fee is an example of:

A) Fee
B) Direct Tax
C) Public Debt only
D) Capital tax

సమాధానం: A

26. Railway fare is an example of:

A) Price of Public Service
B) Income Tax
C) Wealth Tax
D) Direct Tax

సమాధానం: A

27. Payment by beneficiaries of special local facilities is:

A) Special Assessment
B) Income Tax
C) Fiscal Deficit
D) Public Debt

సమాధానం: A

28. Traffic-rule violation payment is:

A) Fine/Penalty
B) Direct Tax
C) Capital Receipt only
D) Income Tax

సమాధానం: A

29. The primary objective of fines is:

A) Discourage violation of laws
B) Maximize Government profit
C) Increase imports
D) Reduce exports

సమాధానం: A

30. Grants received by Government are classified in the textbook under:

A) Non-Tax Sources
B) Direct Tax
C) Indirect Tax
D) Income Tax

సమాధానం: A

Public Debt MCQs

31. Government borrowing from domestic citizens is:

A) Internal Debt
B) External Debt
C) Tax
D) Fee

సమాధానం: A

32. Government borrowing from World Bank is:

A) External Debt
B) Internal Debt
C) Direct Tax
D) Fee

సమాధానం: A

33. Government borrowing from domestic banks is:

A) Internal Debt
B) External Debt
C) Grant
D) Donation

సమాధానం: A

34. IMF and World Bank borrowing is associated with:

A) External Debt
B) Internal Debt
C) Tax Revenue
D) Fees

సమాధానం: A

Fiscal Policy MCQs

35. Fiscal Policy is implemented primarily by:

A) Government
B) Commercial Banks only
C) Households
D) Stock exchanges

సమాధానం: A

36. Fiscal Policy deals with:

A) Public expenditure, revenue and debt
B) Weather forecasting
C) Population census only
D) Stock prices only

సమాధానం: A

37. Which is associated with Financial Administration?

A) Budget preparation and implementation
B) Only private consumption
C) Household saving only
D) Utility maximization only

సమాధానం: A

Budget MCQs

38. India's financial year is:

A) January–December
B) April–March
C) July–June
D) October–September

సమాధానం: B

39. Article associated with the Union Annual Financial Statement is:

A) Article 112
B) Article 32
C) Article 21
D) Article 356

సమాధానం: A

40. Government budget shows:

A) Expected receipts and proposed expenditure
B) Population only
C) Exports only
D) Money supply only

సమాధానం: A

41. Revenue Budget consists of:

A) Revenue Receipts and Revenue Expenditure
B) Capital Receipts only
C) Borrowings only
D) Debt only

సమాధానం: A

42. Revenue Receipts include:

A) Tax and Non-Tax Revenue
B) Borrowings only
C) Disinvestment only
D) Recovery of loans only

సమాధానం: A

43. Borrowings are generally classified in Government Budget as:

A) Capital Receipts
B) Revenue Receipts
C) Tax Revenue
D) Revenue Expenditure

సమాధానం: A

44. Recovery of loans is generally:

A) Capital Receipt
B) Revenue Expenditure
C) Tax Revenue
D) Revenue Deficit

సమాధానం: A

45. Expenditure on construction of roads is generally:

A) Capital Expenditure
B) Tax Revenue
C) Non-Tax Revenue
D) Revenue Receipt

సమాధానం: A

Types of Budget MCQs

46. Balanced Budget means:

A) R = E
B) R > E
C) R < E
D) R = 0

సమాధానం: A

47. Surplus Budget means:

A) R > E
B) R = E
C) R < E
D) E = 0

సమాధానం: A

48. Deficit Budget means:

A) R < E
B) R > E
C) R = E
D) R = 0

సమాధానం: A

49. Classical economists generally favoured:

A) Balanced Budget
B) Permanent Deficit only
C) No Budget
D) Hyperinflation

సమాధానం: A

50. According to textbook treatment, a surplus budget may be useful during:

A) Inflation
B) Depression only
C) Deflation only
D) No economic condition

సమాధానం: A

51. According to textbook treatment, deficit budget may be useful during:

A) Depression
B) Inflation only
C) Hyperinflation only
D) Full-employment boom only

సమాధానం: A

Assertion–Reason MCQs

Code:

A) Both are true and Reason correctly explains Assertion.

B) Both are true but Reason is not the correct explanation.

C) Assertion is true but Reason is false.

D) Assertion is false but Reason is true.

52. Assertion: Public Finance has a significant impact on the economy.
Reason: Government revenue and expenditure can affect income, output and employment.

సమాధానం: A

53. Assertion: A tax necessarily provides an equivalent direct service to each taxpayer.
Reason: Tax is a compulsory contribution without a direct proportionate quid pro quo.

సమాధానం: D

54. Assertion: The burden of a direct tax is generally not shifted.
Reason: Impact and incidence of a direct tax generally fall on the same person.

సమాధానం: A

55. Assertion: Fees and taxes are identical.
Reason: A fee is generally connected with a specific service rendered.

సమాధానం: D

56. Assertion: Government borrowing from the World Bank is external debt.
Reason: The borrowing source is outside the domestic economy.

సమాధానం: A

57. Assertion: Public expenditure tends to rise in a welfare state.
Reason: Modern governments perform expanding economic and social functions.

సమాధానం: A

58. Assertion: A balanced budget has equal estimated receipts and expenditure.
Reason: In a balanced budget R = E.

సమాధానం: A

59. Assertion: A surplus budget has expenditure greater than receipts.
Reason: A surplus budget has receipts greater than expenditure.

సమాధానం: D

60. Assertion: Fiscal policy is a Government policy instrument.
Reason: It operates through Government revenue, expenditure and related fiscal decisions.

సమాధానం: A

One-Minute Master Table

Concept	Remember
Public Finance	Government Income & Expenditure
Hugh Dalton	Income & Expenditure of Public Authorities
Public Expenditure	Government Spending
Public Revenue	Government Income
Revenue Sources	Tax + Non-Tax
Tax	Compulsory Contribution
Adam Smith Canons	Equity, Certainty, Convenience, Economy
Direct Tax	Burden normally not shifted
Indirect Tax	Burden can be shifted
Progressive	Rate rises with income
Proportional	Constant rate
Regressive	Relative burden falls with income
Public Debt	Internal + External
Fiscal Policy	Government fiscal decisions
Budget	Receipts + Expenditure
Financial Year	1 April – 31 March
Article 112	Annual Financial Statement
Balanced Budget	R = E
Surplus Budget	R > E
Deficit Budget	R < E

చివరి నిమిషం పునశ్చరణ

Public Finance → Public Revenue + Public Expenditure + Public Debt

Complete Structure → Expenditure + Revenue + Debt + Fiscal Policy + Financial Administration

Public Revenue → Tax + Non-Tax

Tax → Compulsory Contribution

Adam Smith → Canons of Taxation

ECCE → Equity, Certainty, Convenience, Economy

Direct Tax → Burden normally cannot be shifted

Indirect Tax → Burden can be shifted

Progressive → Income ↑ → Rate ↑

Proportional → Same Rate

Regressive → Relative Burden ↓ as Income ↑

Non-Tax → Fees, Prices, Special Assessment, Fines, Grants, Special Levies etc.

Public Debt → Internal + External

Fiscal Policy → Government

Financial Administration → Revenue + Expenditure + Debt + Budget Administration

Budget → Expected Receipts + Proposed Expenditure

Financial Year → 1 April – 31 March

Article 112 → Annual Financial Statement

Balanced → R = E

Surplus → R > E

Deficit → R < E

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