Question

Read the following text carefully:
The government has allocated ₹ 16.27 lakh crore for major sectors, ranging from defence to rural development to social welfare to commerce and so on. Government expenditure goes to paying states' share of taxes and duties. Around 19% is spent on interest payments and 16% on central sector schemes, with subsidies, pension and other payments contributing 19%. Government revenue is divided between borrowings and other liabilities, which account for massive 27% of the incoming cash. Income tax revenue of around 19%; Goods and Services Taxes (GST) and other taxes of around 18%; Corporation taxes account for around 17%. The next highest provision on this list is ₹ 2.66 lakh crore for rural development. This will include expenditure on rural infrastructure projects and increased outlay for the popular MGNREGA scheme.
On the basis of given text and common understanding, answer the following questions:

• [(i)] Identify the major sources of government revenue and state what percentage does each one of them contribute.
• [(ii)] Discuss the need for allocating funds among different sectors of the economy.

Hint:

Budget allocation → Growth + Welfare + Employment + Stability

Answer 1

(i) Major Sources of Government Revenue

Step 1:Identify sources from the text
The major sources of government revenue mentioned are:

• Borrowings and other liabilities → 27%
• Income tax → 19%
• GST and other taxes → 18%
• Corporation tax → 17%

Step 2:Interpretation

• Borrowings form the largest share of revenue
• Tax revenues (income tax, GST, corporation tax) together form a significant portion

Conclusion (i): \[ \text{Major sources are borrowings (27%), income tax (19%), GST (18%), and corporation tax (17%)} \] (ii) Need for Allocation of Funds
Concept: Government Budget Allocation
The government allocates funds to ensure balanced economic and social development.
Step 1:Economic development

• Investment in infrastructure (roads, irrigation, rural projects)
• Promotes production and growth

Step 2:Social welfare

• Spending on health, education, pensions, subsidies
• Improves standard of living

Step 3:Employment generation

• Schemes like MGNREGA create job opportunities
• Reduces poverty and unemployment

Step 4:Regional balance

• Rural development reduces regional inequalities

Step 5:Fiscal responsibility

• Allocation ensures proper utilization of limited resources
• Helps in achieving economic stability

Conclusion (ii): \[ \text{Allocation of funds is essential for growth, welfare, employment, and balanced development} \]