Revenue: where the money comes from. A government raises money in two broad ways. Tax revenue is compulsory: it is taken, not given in exchange for a specific service. Non-tax revenue is everything else the government earns, meaning dividends from the companies and central bank it owns, fees, interest on loans it has made, spectrum auctions, and asset sales.
- India. Gross tax revenue splits into direct taxes (corporation tax on company profits; personal income tax) and indirect taxes (the Goods and Services Tax, GST, the big post-2017 reform that subsumed most state and central indirect taxes; union excise duties, now largely on petroleum and fuels; and customs duties on imports). Of the total pool, a large, constitutionally-mandated share is devolved to the states on the recommendation of the Finance Commission (roughly 41% of the divisible pool as of the current award), so the Centre keeps the rest. Non-tax revenue is led by the surplus transfer (dividend) from the Reserve Bank of India, genuinely one of the single largest non-tax line items in some years, plus dividends from public-sector undertakings (PSUs). Separately, the budget books capital receipts: disinvestment (selling stakes in PSUs), loan recoveries, and the residual that balances the books, borrowings. Hold that last point; it is the hinge of everything that follows. In Indian budget language, receipts divide into revenue receipts (taxes + non-tax, which do not create a liability) and capital receipts (which include borrowings, which do).
- United States. The federal government's receipts are dominated by individual income taxes (roughly half of all federal receipts) and payroll taxes (social-insurance contributions funding Social Security and Medicare, roughly a third), with corporate income taxes a distant third (around a tenth), and the remainder from excise, customs, estate, and Federal Reserve remittances. Note the structural contrast: the US leans far more on direct taxes on individuals; India, with a tiny income-tax-paying base (only a small single-digit percentage of Indians pay income tax), leans much more on indirect taxes (GST, fuel) that everyone pays through consumption. That contrast matters later. It is one reason India's automatic stabilizers are weaker and its revenue is more exposed to the consumption cycle.