Analysis trends in Central government Revenue - Fiscal Policy, Public Finance Video Lecture | Public Finance - B Com

hi folks Lavinia in my last video I gave
an introduction to the monetary and the
fiscal policy before I come to the main
topic at hand let me give you a quick
recap of the previous video a fiscal
policy deals with how a government or a
country makes money and how it is going
to spend it for various activities that
occur in the country the fiscal policy
in India is controlled by the Ministry
of Finance with support from RBI the our
monetary policy is a sister strategy to
the fiscal policy and it is entirely
controlled by RBI first let us
understand how the government makes
money aside from auctioning things like
spectrum that is 3g 2g 4G etc sale of
cold blocks and the railways the govern
makes money from axis there are two
types of taxes a direct and indirect tax
indirect taxes the best example is
income tax where you have the individual
paying the tax and you get a form 16 as
proof that you are the taxpayer in
indirect tax you pay the tax on behalf
of somebody else for example you pay
fourteen percent on service tax or your
Airtel post Fayetteville and Airtel is
the actual tax payer and they are given
the acknowledgement for paying service
taxes although you have paid the service
tax on your bill you are not given me
acknowledgment by the government for
paying that service tax moving on what
are the main aspects of the fiscal
policy of 2015-2016 one of the key
reforms is the makin India campaign that
was launched by our government this is
done to revive manufacturing in India
almost all manufactured goods today are
made in China even Indian firms like
Micromax
or Hite sign choose to manufacture in
China of the cost it is cheaper goods
and services tax will reform the
taxation system in India by removing
value-added tax this is a complicated
aspect to explain so I won't be able to
do that in today's video as said in my
previous video new services are added in
the service facts net and now two more
services which are online and mobile
advertising
and even taxi services are also subject
to service tax customs duties are taxes
levied on goods which are imported
before India had crazy high import taxes
that ranged from 10% to 400% and this
means if you bought something from
abroad worth rupees 100 you'd have to
pay four times that to the government as
tax coke is a key product in
manufacturing steel so the import duty
on that has gone up from 2.5 percent to
5 percent the reason this has been done
is so that the local resources are
purchased rather than importing them
into India clean energy cess has also
increased significantly cess is a tax on
tax for example when you pay income tax
of rupees one thousand two percent of
this is considered as education cess
service taxes have increased to 14
percent I have mentioned this before the
government knows that very few people
pay income tax because most of India is
not eligible to pay income tax because
we do not earn the minimum 2.5 lakhs per
annum so the only way to ensure revenue
is made from every citizen is by
charging service tax there were no
changes in income tax lapse because
growth of wages of people hasn't been
much and increasing the exemption limit
would only mean fewer tax payers and
less revenue for the government finally
another major change for increasing
revenues they added 12 percent surcharge
on people whose income is greater than 1
crore per annum a surcharge is sort of
like a cess itself that is a tax on tax
this is important because there are a
lot of Indians who acquired a lot of
wealth recently that is there are more
rich Indians today than there were ever
before new services such as Kohinoor
banking from SBI are aimed at the
extremely wealthy people of India and
knowing such rich Indians exists a
higher tax rate is proposed on them
anyway guys thank you for watching this
video please hit the subscribe button
and I will publish part 3 of this video
soon where I will explain the expenses
of the fiscal policy thank you for your
time have a nice day bye