Finance Ministry

The ministry of finance in India governs the entire fiscal system of the Government of India. It centralizes around all the issues in India pertaining to economy and finance. It also includes the task of mobilization of resources in terms of execution of developmental programmes.

It governs the expenditure department of government, which mainly deals with the transfer of resources across the states in India. The three departments headed by the ministry of finance in India include: a) economic affairs, b) expenditure, and c) revenue.

Expenditure under Ministry of Finance in India-

This department of expenditure determines the distribution of funds between Union and the state governments. As per the Indian Constitution, no tax can be levied or collected, public funds should not be utilized to carry out any expenditure, and the higher officials are only permitted to use public funds if it is sanctioned by the parliament. The two bodies working under the expenditure department are known as the Consolidated Fund of India and Public Account of India. Other receipts such as deposits, service funds, and remittances are deposited in the public account and therefore the dispersal of the same is not depended upon the vote of parliament.

Revenue under the Ministry of Finance in India-

The chief sources of revenue or Union tax include customs duties, income taxes, corporate taxes, and union excise duties. Revenues that belong to the non-taxable group consist of interest receipts such as the interest sum paid by the railways and telecommunications sector along with dividends and profits. The important revenue-earning units are the taxes and duties paid by various state governments, taxes and grants received from the Union, and other local taxes such as property taxes, octroi, and terminal taxes.