Original Research Article http://doi.org/10.18231/j.jmra.2020.040 Journal of Management Research and Analysis, October-December, 2020;7(4):172-182 172 Public revenue in India: Trend and effect Devasia M D 1 , N Karunakaran 2* 1 Associate Professor and Research Guide, 2 Principal and Research Guide, 1 Dept. of Economics, Nirmalagiri College, Kuthuparamba, Kannur, Kerala, India, 2 Economics of Kanpur University, People Institute of Management Studies (PIMS), Kasaragod, Kerala, India *Corresponding Author: N Karunakaran Email: narankarun@gmail.com Abstract Public revenue is a major component of budget shows the manner in which revenue is collected during a financial year by government to boost economic growth. The success of government plan for the growth and development of a country depends on the source and size of public revenue. In India Public revenue acts as government’s most important economic and fiscal policy tool in controlling money supply and maintaining general price level. It is not only important for the corporate but for individuals from all sections of the society as they look forward to tax exemptions and reliefs. Even though India ranks third in purchasing power parity, only a few percentages of population pay income tax. The government's effort to widen the tax base has resulted in an 80 percent jump in number of IT returns filed. The analysis revealed that Public Revenue and macroeconomic indicators are significantly interlinked and correlated. Tax buoyancy is an indicator to measure efficiency to growth in GDP and Gross tax buoyancy coefficient remained fluctuating during the period 1990-91 to 2016-17. Keywords: Budget, Revenue, Capital, Tax, GDP, Trend, Effect. Introduction Government budget is framed in the shape of a financial plan which is a statement of income and expenditure relating to various economic and other activities that the government intends to perform in the coming period, usually a year. Budget not only shows the public receipt and expenditure but also the attitude of government towards its people, what value it given to the people and priorities given by the country for different sectors of the economy (Sonika Gupta K. S, 2016). The structure of budget frame may be different in different countries. In India, government account of the budget are presented in three parts, viz.,(a) Consolidated fund, (b) Contingency fund and (c) Public account fund. Nearly, 20 percent of public receipt comes from borrowings and other liabilities, and the corporate tax is the major source of revenue after implementing GST. Though, India is third rank in purchasing power parity (Sidhartha, 2020), only a few percentage of people pay income tax. In the last four years, the government's efforts to widen the tax base resulted in an 80 percent jump in number of IT returns filed to 6.85 crore in 2017-18 from 3.31crore in 2013-14. 2.02 crore individuals filed income- tax returns in 2017-18 declaring their income, but paid zero tax since they are not in the taxable income bracket yet; the number of such companies was 3.9 lakh. So it is very essential to analyze the trend, pattern and effects of public revenue in India; more specifically, how India obtains its revenue resource for making development and the impact of such revenue on real macro variables. Materials and Methods The specific objectives of the paper are: (a) to analyze the trend, pattern and composition of revenue of the central government of India; and (b) to examine the impact of public revenue on major macroeconomic variables. The study is based on the secondary data collected from various volumes of RBI Bulletin, Central Budget Document in different years mainly 2000 to 2019, Economic Survey, Central Statistical Office Publications, Indian Public Finance Statistical Year Book, Report of Planning Commission and Census of India. For analytical purpose, the period of study (1991-2019) is divided into three: 1990- 2000, 2000-10 and 2010-19. For analysis correlation and regression were used. Results, Analysis and Discussion Trend and pattern of public revenue Government raises its fund to finance their activities from various sources like tax and non-tax sources, currency mint, fees, fines, sale of public assets, and so on (Rajan Goyal, J. K, 2004). Adam Smith divided public revenue as revenue from the people and revenue from state property; while Dalton preferred to distinguish between public receipts and public revenue (Seligman, 1892). Classification of receipts Budget 1957-58 divided the income of central government into revenue and capital account. Revenue receipts include revenue received in the form of tax and non-tax revenue and capital account composed of market borrowing, small saving, provident fund, special deposit, recovery of loans, disinvestment receipts, and external loan (Devasia M D, Karunakaran N and Vishnu Prathap M, 2020). Table 1 shows the distribution of revenue and capital receipts. Total receipts continuously increasing since 1990, from Rs. 93951 crore in 1990-91 to 2315113 crore in 2018- 19, showing nearly four-fold increase in total receipt (Fig. 1). In the first phase of 1990-99, 60.8 percent of total receipt is from revenue receipts; in the second (62 percent) and third phase (65 percent). The major reason behind this is due to the significant measures taken by government of India for