Government tax revenue hits record high: where taxpayer money is spent
Direct tax collections rose 13 percent this year, and the government splits every rupee across states, defense, welfare schemes and debt repayment.
Whether the earner is a businessman or a salaried employee, a part of their income is collected by the government as tax. The question is where this money in the government's coffers actually goes and what it is spent on.
It is important to understand that money from tax is not spent on any single purpose, but is divided across several essential areas. The money the government receives from income tax and corporate tax is not kept in one place but is deposited in India's Consolidated Fund. The government then spends this money on the country's various needs. As per the government's budget, this entire expenditure is divided into different heads that together add up to 100 percent.
Of the total expenditure, 22 percent is spent on giving states their share of taxes. Of the remaining amount, 20 percent is used to pay interest or loan installments. Meanwhile, 17 percent is spent on central sector schemes.
Eleven percent of the money goes to defense, that is, on border security and buying weapons. Besides this, 8 percent is spent on centrally sponsored schemes such as MGNREGA and the PM Awas Yojana. Seven percent goes to Finance Commission grants and other transfers.
Of the remaining share, 7 percent is set aside for other administrative expenses, 6 percent for subsidies and about 2 percent for pensions. Together, all these essential heads add up to 100 percent of the total expenditure.
As for direct tax revenue, the government has earned 12.12 lakh crore rupees from direct taxes up to September 17. Notably, this revenue is 13 percent higher than last year. However, the government does not spend this entire revenue on any one sector, but distributes it across several key sectors according to the country's needs.
