State Non-Tax Revenue

State non-tax revenue comprises revenue receipts obtained by a state government without imposing taxes. It includes income from services, assets, natural resources and investments, together with grants from the Union; unlike capital receipts, revenue receipts ordinarily neither create liabilities nor reduce government assets.

Overall classification

State non-tax revenue has two broad components: own non-tax revenue, generated from the state's activities and assets, and grants-in-aid from the Union. Grants are generally shown separately from own non-tax revenue in government accounts.

Receipts from services and administration

States collect fees, user charges and other receipts for services supplied by their departments.

• Receipts from general services include fees, fines, penalties and charges connected with administration, police, prisons and public works.
• Receipts from social services arise from education, health, housing, water supply and related public services.
• Receipts from economic services include irrigation charges, transport receipts and collections from forestry, fisheries, industries and other departmental activities.

Income from assets and natural resources

A state may earn income from financial investments, loans, property and resources under its control.

• Interest receipts arise from loans and advances given by the state, including those to public enterprises and local bodies.
• Dividends and profits are received from state public sector enterprises and other government investments.
• Royalties, rents and licence payments may arise from minerals, forests and other natural resources, subject to the applicable constitutional and statutory framework.
• Rent from government property and receipts from departmental commercial undertakings also contribute to non-tax revenue.

Grants from the Union

Union grants support state finances without creating repayment obligations. The Constitution provides for grants under Articles 275 and 282.

• Finance Commission-related and other Union grants form part of non-tax revenue receipts.
• Grants differ from a state's share in Union taxes, which is classified as tax revenue.