1. Central Government:
Direct Taxes:
- Increasing trend due to economic growth and tax reforms.
- Key contributors: Income tax, corporate tax.
- Indirect Taxes:
- Fluctuating trend influenced by economic conditions.
- Includes GST, customs, excise duties.
2. State Government:
- Own Revenue:
- Gradual increase driven by state-specific taxes and levies.
- Major sources: State GST, sales tax, excise duty.
- Central Transfers:
- Dependency on central grants for stability.
- Influenced by fiscal policies at the national level.
3. Common Trends:
- GST Impact:
- Significant impact on both central and state revenues.
- Streamlining indirect taxes and enhancing compliance.
- Economic Growth:
- Positive correlation between revenue and economic growth.
- Downturns may affect tax collections.
4. Challenges:
- Compliance Issues:
- Addressing tax evasion and improving compliance crucial.
- Implementation of technology for better monitoring.
Dependency on Specific Sectors:
- Reducing reliance on certain sectors for revenue diversification.
- Promoting a balanced economic structure.
5. Future Outlook:
- Digital Transformation:
- Embracing technology for efficient tax administration.
- E-invoicing, digital payments, and data analytics.
- Policy Reforms:
- Continual reforms for tax simplification and revenue enhancement.
- Collaboration between central and state governments.
