Which of the following, if their working is improved, can significantly help the Government of India increase its non-tax revenue?

Introduction / Context:

Government revenue in India comes from two broad sources: tax revenue and non tax revenue. While taxes are widely discussed, non tax revenue also plays an important role in financing public expenditure. Non tax revenue includes profits and fees from public sector enterprises, interest receipts, user charges for public services, and dividends. This question asks you to identify which types of government run activities, if made more efficient, can help increase non tax revenue for the Government of India.

Given Data / Assumptions:

• The subject is non tax revenue of the Government of India and State governments.
• Options list three major public service sectors: commercial irrigation projects, State Road Transport Corporations, and Electricity Boards.
• We assume that these bodies are run as public enterprises or government departments that can charge user fees and tariffs.
• We are asked which of these, if their working improves, can contribute to higher non tax revenue.

Concept / Approach:

Non tax revenue arises from sources other than compulsory taxes. It includes receipts from economic services provided by the government. Commercial irrigation projects charge fees or water rates, State Road Transport Corporations charge fares, and Electricity Boards charge tariffs for power supply. When these entities work efficiently, reduce losses, curb leakages, and rationalise user charges, they can generate higher surpluses or at least reduce the need for subsidies. All three listed activities therefore have the potential to increase non tax revenue when their functioning is improved. The best answer is "All of the above".

Step-by-Step Solution:

Verification / Alternative check:

To verify, recall that government budgets typically list receipts from economic services and public enterprises as part of non tax revenue. In many Indian States, financial reports show large receipts and sometimes deficits in irrigation, transport, and power sectors. When these sectors are run more commercially and efficiently, the gap between cost and revenue can narrow or reverse, directly affecting the non tax revenue figures. Textbooks on public finance and Indian economy often cite these sectors as examples of potential areas for improving non tax revenue through better management.

Why Other Options Are Wrong:

Option A, Commercial Irrigation Projects, is indeed a valid source of non tax revenue, but choosing only this option ignores the other two sectors which also generate receipts. Option B, State Road Transport Corporations, likewise contributes through ticket sales but is not the only source. Option C, Electricity Boards, are significant revenue generators but again not exclusive. Since the question asks how non tax revenue can be increased and all three listed sectors qualify, selecting only one of them would be incomplete. Therefore, the most accurate answer is that all of the given sectors, if better managed, can raise non tax revenue.

Common Pitfalls:

Candidates sometimes misinterpret non tax revenue as coming only from one or two prominent sectors and underestimate the breadth of government economic activities. Another common error is to think that only profit making enterprises count, ignoring that simply reducing losses or improving cost recovery also strengthens non tax revenue. Some examinees may also confuse these receipts with capital receipts or with tax categories like excise or GST. Remember that user charges and fees from government services such as irrigation, transport, and power are classic examples of non tax revenue.

Final Answer:

Improving the working of commercial irrigation projects, State Road Transport Corporations, and Electricity Boards can all help increase non tax revenue. Therefore, the correct answer is All of the above.