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Cess on petrol, diesel, telecom services proposed to fund Swachh Bharat initiatives

27-01-2016 | Swachh Bharat, Narendra Modi, Swachh Bharat Abhiyaan, New Delhi, India, Swachh Bharat Mission

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NEW DELHI: You could soon be paying more for the Narendra Modi government's Swachh Bharat Abhiyan, with further levies being considered to fund the cleanliness programme. The mission that was launched on October 2, 2014, envisages an investment of nearly Rs 2.23 lakh crore by October 2019. The measures under consideration include a 0.5% cess on petrol, diesel and telecom services, a 1% cess on accumulated waste produced by mineral generation plants and a 0.5 percentage point increase in service tax. The government imposed a 0.5% Swachh Bharat cess on taxable services from November 15. The government is also contemplating long-term, tax-free Swachh Bharat bonds to raise funds, a senior official told ET.

An announcement to this effect could be made in the February budget if it finds favour with the finance ministry. The proposals have been made by Niti Aayog, which has been in talks with states on Swachh Bharat. "Government is considering all options to raise funds for the programme and one or more of these could be announced as we go forward," the official said. The fund-raising recommendations are based on suggestions by a sub-group of chief ministers on Swachh Bharat set up by Niti Aayog. According to the official, Niti Aayog's report on the programme had recommended several steps, saying "it is very comprehensive in its coverage and requires huge amounts of funds to cover all aspects of the mission."
The sub-group of chief ministers on Swachh Bharat had said that the Centre and states should jointly carry forward the national programme. "The sharing pattern of funds for this programme between the Centre and states may be in the ratio of 75:25, while for hilly states it may be kept at 90:10," it had said, with the larger proportion to be paid by the Centre. It has also recommended that states issue Swachh Bharat bonds, which could be exempted from tax by the Centre.
The Swachh Bharat Mission includes building household toilets, community and public toilets and scientific waste management. The estimated cost of the event is Rs 2.23 lakh crore with expenditure in rural areas pegged at Rs 1.34 lakh crore and in urban areas at Rs 62,010 crore. Apart from this, spending on school toilets is put at Rs 2,528 crore, anganwadi toilets at Rs 768 crore and individual toilets under the rural employment programme at Rs 24,000 crore.
ET VIEW: GST, not cess, for Swachh
A cess is a bad idea, and the government should abandon any such plan that puts an extra burden on citizens. Successive finance commissions have discouraged the Centre from levying cesses and surcharges. The proceeds are not shared with the states, though the Constitution entrusts the tasks of public health and sanitation to state governments. To finance the Swachh Bharat Mission, the government should quickly adopt GST that provides for set-offs for all taxes paid on inputs. Cesses and surcharges should be subsumed in GST.
 

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