NextQ60

From the set of terms given in Column-I and Column-II, choose the correct pair : Column-I | Column-II (a) Non-tax Revenue | (i) Goods and Services Tax (b) Indirect Tax | (ii) Free-rider (c) Capital expenditure | (iii) Borrowings (d) Private goods | (iv) Rivalrous in nature

Question 59

Read the following passage carefully : According to the Economic Survey 2024 - 25, the government's budget projections for the fiscal year 2025 - 26 indicate that gross direct tax revenue will rise by 12.7%, while gross indirect tax collections are expected to grow by 8.3% relative to FY 2024 - 25. Direct taxes include income tax and corporate tax, reflecting earnings and profits of households and firms. It plays a key role in revenue growth of the government. Indirect taxes encompass Goods and Service Tax (GST), custom duties and other transaction-based levies. Higher growth rate projected for direct taxes suggests a push to enhance tax buoyancy through improved compliance and reforms. On the other hand, indirect taxes are expected to benefit from consumption trends and Goods and Services Tax (GST) administration improvements. The balance tax strategy aims to mobilise resources while supporting fiscal consolidation and sustainable economic growth. On the basis of the above passage and common understanding, answer the following questions : (i) Differentiate between the two types of taxes indicated in the above text, with suitable examples. (ii) Elaborate the likely consequences of the tax projections made by the government.

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