(i) Finance Commission aims to reduce the fiscal imbalances between the centre and the states (Vertical imbalance) and also between the states (horizontal imbalance). It promotes inclusiveness.
(ii) A Finance Commission is set up once in every 5 years. It is normally constituted two years before the period. It is a temporary Body.
(iii) The 14th Finance Commission was set up in 2013. Its recommendations were valid for the period from 1st April 2015 to 31st March 2020.
(iv) The 15th Finance Commission has been set up in November 2017. Its recommendations will be implemented starting 1 April 2020

i) Revenue Budget:
It consists of revenue receipts and revenue expenditure. Moreover, the revenue receipts can be categorised into tax revenue and non-tax revenue. Revenue expenditure can also be categorised into plan revenue expenditure and non-plan revenue expenditure
ii) Capital Budget:
It consists of capital receipts and capital expenditure. In this case, the main sources of capital receipts are loans, advances etc. On the other side capital expenditure can be categorised into plan capital expenditure and non-plan capital expenditure.
iii) Supplementary Budget:
During the time of war emergencies and natural calamities like tsunami, flood etc, the expenditures allotted in the budget provisions are not always enough. Under these circumstances, a supplementary budget can be presented by the Government to tackle these unforeseen events.
iv) Vote - on - Account:
Under Article 116 of the Indian Constitution, the budget can be presented in the middle of the year. The reason may be political in nature. The existing Government may or may not continue for the year, on account of the fact that elections are due, then the Government places a ‘lame duck budget’. This is also called ‘Vote-on-account Budget
v) Zero Base Budget:
The Government of India presented Zero-Base-Budgeting (ZBB first) in 1987-88. It involves fresh evaluation of expenditure in the Government budget, assuming it as a new item.
vi) Performance Budget:
When the outcome of any activity is taken as the base of any budget, such budget is known as ‘Performance Budget’. For the first time in the world, the performance budget was made in USA

1. Capitation tax
2. Duties in respect of succession to agricultural land.
3. Duties of excise on certain goods produced or manufactured in the State, such as alcoholic liquids, opium, etc.
4. Estate duty in respect of agricultural land.
5. Fees in respect of any of the matters in the State List, but not including fees taken in any Court.
6. Land Revenue.
7. Rates of stamp duty in respect of documents other than those specified in the Union List.
8. Taxes on agricultural income.
9. Taxes on land and buildings.
10. Taxes on mineral rights, subject to limitations impose by Parliament relating to mineral development.
11. Taxes on the consumption or sale of electricity.
12. Taxes on the entry of goods into a local area for consumption, use or sale therein.
13. Taxes on the sale and purchase of goods other than newspapers.
14. Taxes on the advertisements other than those published in newspapers.
15. Taxes on goods and passengers carried by road or on inland waterways.
16. Taxes on vehicles.
17. Taxes on animals and boats.
18. Taxes on professions, trades, callings and employments.
19. Taxes on luxuries, including taxes on entertainments, amusements, betting and gambling.
20. Tolls.

The revenue obtained by the government from sources other than tax is called Non-Tax Revenue. The sources of non-tax revenue are
1. Fees
Fees are another important source of revenue for the government. A fee is charged by public authorities for rendering a service to the citizens. Unlike tax, there is no compulsion involved in case of fees.
2. Fine
A fine is a penalty imposed on an individual for violation of law. For example, violation of traffic rules, payment of income tax after the stipulated time etc.
3. Earnings from Public Enterprises
The Government also gets revenue by way of surplus from public enterprises. Some of the public sector enterprises do make a good amount of profits. The profits or dividends which the government gets can be utilized for public expenditure.
4. Special assessment of betterment levy
It is a kind of special charge levied on certain members of the community who are beneficiaries of certain government activities or public projects. For example, due to a public park or due to the construction of a road, people in that locality may experience an appreciation in the value of their property or land.
5. Gifts, Grants and Aids
A grant from one government to another is an important source of revenue in the modern days. The government at the Centre provides grants to State governments and the State governments provide grants to the local government to carry out their functions.
6. Escheats
It refers to the claim of the state to the property of persons who die without legal heirs or documented will.

(i) War and preparation for war:
Waging war has become one of the important causes for incurring debts by the governments.
(ii) Social obligation:
Modern states are considered to be 'welfare states' and they have to undertake many social obligations like public health, sanitation, education, insurance, transport and communications etc.
(iii) Economic development deficit:
(1) The government has to undertake many projects for economic development of the country.
(2) Construction of railways, power projects, irrigation projects, heavy industries etc. Employment: Most of the governments of modern days face the problem of unemployment and has become the duty to solve this by making huge public expenditure.
(v) Controlling inflation:
The government can withdraw excess money from circulation, by raising public debt and thus prevent prices from rising.
(vi) Fighting depression:
During the depression phase, private investment is lacking.