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Fiscal consolidation

Is" improving the performance of PSUs" part of fiscal consolidation??


  • All efforts to attain fiscal consolidation can be categorized into 2 categories
    1. Efforts to raise Revenue Increase
    2. Efforts to reduce expenditure.

    Following is a break-up of GoI's revenues as per budget 2016

    a. Borrowings and other liabilities = 21%
    b. Corporate Tax + Income Tax = 19% + 14%
    c. Customs + Excise Tax + Service Tax = 9% + 12% + 9%
    d. Non Tax Revenue = 13%
    e. Others = Non debt capital receipts

    A major portion of 13% Non Tax Revenue comes from PSUs/CPSEs.
    A raise in performance of PSUs will mean more contribution to GoI's revenues.
    Hence better performance by PSUs should add towards fiscal consolidations of GoIs budget.


  • Thanks for the lucid explanation
  • @hiteshshandilya what is non tax revenue by the way.
    (revenue collected other than taxes but examples?)

  • edited July 2016
    श्रमम् विना न किमपि साध्यम्
  • punditjee said:

    @hiteshshandilya what is non tax revenue by the way.
    (revenue collected other than taxes but examples?)

    Examples of non-tax revenue:
    1. Dividends received from Central PSUs
    2. Dividends/surpluses from (Nationalised) banks and other financial institutions
    3. Income from services provided such as medical services, family welfare, urban development, information and broadcasting, police and defence services (including security of installations) etc.
    4. Income from economic services - fisheries, forestry, animal husbandry etc.
    5. Interest receipts from loans given to state governments or others.
    Sharpen your axe, before cutting down the tree...
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