August 9, 2016
Trinamool’s Derek O’Brien speaks during Zero Hour on the utilisation and disbursement of cess collected under various heads | Full transcript
Sir, while the Government is peddling cooperative federalism – I’m very happy that you’ve allowed this Zero Hour. The Finance Minister is also here, and this would be of interest to him because this is an issue on which all parties and all parties are one; he can address this issue today. What is that issue, Sir? Cess.
The Government collects cess under various heads, with the amounts being transferred to the specific fund set up for the purpose. The present Government has implemented two new cesses in the two years since it came to power. With the implementation of Swachh Bharat Abhiyan Cess in 2015 and Krishi Kalyan Cess this year, the service tax rate payable in the country has gone up to 15%. The Government has collected Rs 3901.78 crore from the Swachh Bharat Abhiyan Cess in FY 2015-16 and Rs 759 crore from Krishi Kalyan Cess for the month of June 2016.
However, a closer look at the Government account paints a grim picture of how the funds are lying unutilised in the public coffer. From 2002 to 2015, Rs 66117 crore was collected for the Universal Service Obligation Fund, of which Rs 2698 crore has been spent, a mere 40.8%. It gets even worse as from 1996-2015 Rs 5784 crore was collected under Research and Development Cess of which 78.8% remains unutilised and 100% of the cess collected on tea (Rs. 57.37 crore in 2014-15) is also unutilised.
A CAG report of 2014-15 had stated as much: ‘Specific purpose cess being collected were also not credited to the earmarked funds in the Public Account, thus leading to inaccurately reflecting the unspent amount of cess collected by the Government over the years.’
The Sarkaria Commission in its report had also recommended that while it may be necessary for the Government to levy cesses in view of specific needs, their application should be for limited durations and for specific purposes only.
That leads us to the bigger question, on GST. Will the Government consider that the cesses should be subsumed by the GST, because unless this happens, Sir, it will not be true federalism. The cesses have to be subsumed because, otherwise, you are collecting the cess but you are under-utilising them.
Everybody has been quoting the Chief Economic Advisor on GST. But he himself has said that cess should be subsumed in GST, Sir. If this Government is true to the spirit of federalism, it should seriously consider absorbing all the cesses into GST.
Sir, while on the subject of cooperative federalism – there are letters going out to Chief Ministers, appointing BDOs from the Centre. There are letters going out to Chief Ministers which are saying IAS officers from the State cadre (in my case, Bengal) have to spend three to six months in Delhi. This is actually impeding on the independence of the State Government.
So, whether it is Aadhar card or anything else, let us do it the best way we can. Don’t make it compulsory. Don’t send out letters like these. Stop collecting the cesses, Sir, and if you want a good GST, Sir, subsume the cesses into GST because if it is discussed in the Committee of Empowered Finance Ministers, they may also have the same opinion; but I can’t second-guess them.
Thank you very much, Sir, for the time.
