Question

You have successfully found out the main sources of non-tax revenue, in the above activity. Now clarify each of them. An example is given for you.

Interest: Interest is the amount received for the loans provided by the government

Answer 1

Fees: Reward collected for the government’s services.

Eg: License fees, Tuition fees, Registration fees etc.

Fines and penalties: Punishments for violating the laws.

Grants: Financial aid provided by one government to another.

For example, grants are provided by central and state government to local self governments.

Interest: Amount received for loans provided by the government to various enterprises, agencies and countries.

Profit: Income received from the enterprises operated by the government. 

Eg. Profit from Indian Railways.