1. What is Tax Revenue?

Tax is a levy imposed upon the public by the Government through legislation with out quid pro quo i.e. the Government collects revenue for its own existence so as to govern the State.  For paying the tax, the public shall not expect any direct returns from the Government. E.g. Income Tax.  Revenue generated by levying taxes is Tax Revenue.

2. What is Non Tax Revenue?

This is revenue generated by way of fees and service charges.  It is quid pro quo i.e. the public will have to pay (the tax ) for having got certain benefits either directly or indirectly from the Government.

3. What are Grants-in-aid?

As far as the State Government is concerned, the aid received by the State Government from the Government of India is classified as ‘Grants-in-aid’.  In case of Government of India, the aid may be received from other countries as also, institutions such as World Bank and International Monetary Fund.

4. What is ways and means advance?

This an advance given by the Reserve Bank of India to  Governments (State/Central) to meet the short fall in the daily minimum cash balance that Government are required to maintain with RBI.

5. Who monitors the cash balance position of State / Central Government?

Central Accounting Section (CAS), Reserve Bank of India,  Nagpur.

6. When is the ‘Overdraft’ sanctioned by the RBI?

When the Ways and Means is fully exhausted, the Government can avail the Overdraft to meet the shortfall in the minimum cash balance to be maintained with RBI.

7. What is the criterion for determining the Ways and Means advance sanction?

The Ways and Means Advance varies for different Government. The limit of Ways and Means Advance depends upon  the average Revenue Receipts of the Government concerned.

8. How is  the recovery of overpayment in the Government Accounts to be treated?

The recovery of overpayment shall be treated as 'Reduction of Expenditure' under the head in which the excess payment was made. It shall not be treated as 'Revenue Receipts'.

9. How are “Refunds of Revenue” to be treated?

The ‘Refunds of Revenue’ shall be treated as ‘reduction of receipts’ i.e. under the receipt head, it may be shown as minus receipt. It shall not be treated as expenditure to the Government.

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