India, s revenue from back-office outsourcing is expected to surge nearly five-fold to $50 billion by 2012 despite a possible recession in the key of succession of United States market, an industry said this. But a skills shortage, creaky infrastructure in small towns, and cities and rapidly rising wages are major challenges. The sector has logged 35 percent annual growth over the last five years to hit annual revenues of about $11 billion, with the bulk coming from exports, said the study by leading IT lobby group Nasscom and consulting firm Everest."We have seen that when there are recessions and when there are costs pressures that come in, the companies still want to cut costs," Som Mittal, president of the National Association of Software and Service Companies, or Nasscom, told reporters. India's back-office firms like Infosys BPO, a unit of No. 2 software firm Infosys Technologies; have thrived by providing Western firms with services such as processing insurance claims, managing payrolls and customer support. The boom in business process outsourcing, or BPO, is built on a large, skilled and cheap English-speaking work force. The sector employs 700,000 people and is expected to provide direct employment to about 2 million by 2012.

INTRODUCTION:

Central Government Expenditure on Social Sector Shows Massive Increase

The economic survey of 2008-09 tells or states that Human Development and increase social welfare and well being of the people of the nation is the ultimate objective of development planning. According to this survey an as per UNDP Human Development report, 2009, the HDI of India in 2007 was 0.612. This survey goes on to the state that while the trend indicating improvement in HDI is heartening, there is no room for complacency, as India is still in the medium of Human Development category. India’s commitment toward social increased welfare and well being of its people can be gauged by the massive increase in the share of Central Government expenditure on social services including rural development. This plan and non-plan has increased from 10.46 per cent in 2003-04 to 19.46 per cent in 2009-10.

National income, consumption expenditure, saving and capital formation, 2008-09:

The Central Statistical Organization (CSO), Ministry of Statistics and programme implementation has released the quick estimates of national income, consumption expenditure, saving and capital formation for the financial year 2008-09. Along with quick estimates the CSO is also introducing the new series of national accounts statistics with base year 2004-05. GROSS Domestic Product (GDP) at factor cost at constant (2004-05).Prices in 2008-09 is estimated at Rs.41, 54,973 crores as against Rs.38, 93,457 crores in 2007-08 registering a growth of 6.7 per cent during the year as against the growth rate of 9.2 per cent during the previous year. At current prices, GDP in 2008-09 is estimated at Rs. 52, 28,650 crores as against Rs.45, 40,987 crores in 2007-08, showing an increase of 15.1 per cent during the year.

Consumption expenditure, saving and capital formation:

In order to derive the GDP at market prices, the GDP at factor cost is adjusted by adding indirect taxes net of subsidies. As various components of expenditure on gross domestic product, namely, consumption expenditure and capital formation, are normally measured at market prices, the discussion in the following paragraphs is in terms of market prices only.

Contribution of various sectors in the new series:

and Old Series for the year 2004-05

Industry		New Series (base Year 2004-05)	Old Series (base Year 1999-2000)
1	Agriculture, forestry and fishing	18.9	19.2
1.1	Agriculture	15.9	17.4
1.2	Forestry and logging	2.1	0.8
1.3	Fishing	0.9	1.0
2	Mining and quarrying	2.9	2.9
3	Manufacturing	15.3	15.8
3.1	Registered	9.9	10.9
3.2	Unregistered	5.4	4.9
4	Elect. gas and water supply	2.1	2.1
5	Construction	7.7	7.4
6	Trade, hotels and restaurant	16.1	16.0
6.1	Trade	14.6	14.6
6.2	Hotels and restaurants	1.5	1.4
7	Transport, storage and comm.	8.4	8.5
7.1	Railways	1.0	1.0
7.2	Transport by other means	5.7	5.5
7.3	Storage	0.1	0.1
7.4	Communication	1.7	1.9
8	Financing, insurance, real estate and business services	14.7	14.1
8.1	Banking and insurance	5.8	5.8
8.2	Real estate, ownership of	8.9	8.2
	Dwellings and business services
9	Community, social and personal services	13.9	14.0
9.1	Public administration and defense	6.0	6.0
9.2	Other services	8.0	8.0
10	Gross domestic product at factor cost (1 to 9)	100.0	100.0

CONCLUSION:

Here the conclusion which I draw after getting into all the objectives and the ideas I came across only one thing whether the government should choose expenditure or revenue? The main thing is that we are getting these expenses from various fields and it’s quite unmanageable. Our government is not working on this context. We faced lots of problems in share markets and it’s because of the improper system, which we have. Everything is done but the thing which is lacking behind is a system a proper system. One day we get to know the news that we had this and this market values and the next day again the loss double than the previous. This seeks whether there exists interdependence between total receipts, tax receipts and total expenditures measures of the central government. We could infer that the government should proceeds with its expenditure plans and they find means by which revenues can be raised to finance these expenditures. There is a casual relation between expenditures and revenues which in turn could have an impact on deficit management. Firstly, with the initiation of fiscal reforms process especially the tax reforms measures, the immediate impact was the sharp reduction after the enactment of the Fiscal Responsibility and Budget Management Act (FRBMA), 2003 in both the revenue and fiscal deficits of the central government. This improvement in the fiscal position of the central government has been achieved on the strength of higher revenues. Secondly, there has been a significant increase in receipts on the revenue account and capital account of the central government. With the reform measures undertaken by the central government, revenue receipts as compared to the capital receipts of the central government have grown at a higher rate during the post-reform period. But the efforts have not resulted into significant improvement as the growth of revenue receipts in the post-reform period remained less than the pre-reform period of fifteen years. Thirdly, no significant improvement in the revenue receipts as per cent of GDP has been observed in the post-reform period as the ratio has remained less than 10 per cent for most of the years. Fourthly, tax revenue as well as non-tax revenue of the central government had grown at the same rate of 15 per cent per annum in the pre-reform period and were higher than that of the post-reform period. Thus there is an urgent need to pay special attention to augment revenue receipts from tax as well as non-tax sources in order to tackle fiscal crisis. Fifthly, the share of market loans in total capital receipts is the highest throughout the study period. During 1975-76, external debt constituted half of the capital receipts of the central government but thereafter, in the post-reform period, this share has continuously declined and has reached to 5 per cent only. Thus reforms regarding improvement in the composition of capital receipts are required to be made by the central government. But the central government is resorting to a high level of market borrowings which are expensive in nature and thus will lead to higher interest burden in future which can aggravate the problem of fiscal imbalance.

REFERENCES:

Revenue law reform – Weekly Journals.

Subrata K. Mitra and V.B. Singh. 1999. Democracy and Social Change in India: A Cross-Sectional Analysis of the National Electorate.

Bernardi, Luigi and Fraschini, Angela (2005). Tax System and Tax Reforms In India.

"Indif_real_GDP_per_capitaa says 21 of 29 states to launch new tax". Daily Times. 25 March 2005.

Various Issues of Handbook of Statistics on Indian Economy.

Sarma, Atul and Manish Gupta “A Decade of Fiscal Reforms in India”, available at – ispasyps.gsu.edu, 15 April, 2002

Received on 29.01.2013 Modified on 19.03.2013

Int. J. Rev. & Res. Social Sci. 3(1): Jan. – Mar. 2015; Page 48-49