Direct and Indirect taxes registered improvements over the previous year’s level; the improvement in direct taxes was, however, more pronounced as a proportion of GDP. There was also qualitative improvement in expenditure composition in 2003-04 as reflected in a shift in favour of the developmental component.
In terms of GDP, the development expenditure of the Centre and States exhibited an improvement of one percentage point over the previous year. The share of capital outlay in the total expenditure showed an improvement in 2003-04 by 2.6 percentage points.