Revenue receipts are classified under two heads: tax revenue and non-tax revenue. Tax revenue has always occupied a dominant place in the revenue receipts of the government. It accrues to the government through a variety of taxes imposed by it like corporation tax, income tax, custom duties and excise duties. The total collection of some of these taxes is shared with the states by the centralgovernment. The principal components of non-tax revenue are net contributions of public sector undertakings, interest receipts, fiscal services, general services, social and community services, economic services and external grants.
Looking at the share of tax revenue and non-taxrevenue of the centre, it is found that the main source ofrevenue of the central government is tax revenue whichremained 70 to 80 per cent of the total revenue receiptsthroughout the study period (Graph 5.4). This is mainly dueto indirect taxes which occupy a dominant place in centralfinances. The table clearly shows that there has been arapid increase in the tax revenue of the central governmentfrom Rs. 6009.77 crore in 1975-76 to Rs. 38403.99 crore in1989-90 which recorded the growth of 15 per cent duringpre-reform period (Table 5.4 and Table 5.5). Firstly, it wasdue to higher collections from union excise duties, customduty and corporation tax (Economic Survey, 1983-84; Report on Currency and Finance, 1984-85). Secondly, it wasdue to improvement in the share of direct taxes