'Cess Introduced in Budget 2021 will improve States 'Agri Infra'

A top government official said on Tuesday that the agri Cess implemented in the Union Budget 2021-22 will eventually go towards improving APMC mandis and associated farming facilities, both of which are controlled by states, dismissing criticism that the Cess deprives states of revenue as its receipt falls entirely in the kitty of the Centre.

The implementation of tax on Employees' Provident Fund (EPF) interests in accounts where the share of workers is more than Rs 2.5 lakh per annum was also justified by official sources, stating that many people parked money in crores to get a guaranteed return of more than 8.5 percent.

They estimated that only one percent of overall account holders will be affected by the measure. In an off-the-record conversation, the Employees' Provident Fund (EPF) is basically for employees and others who are relying on it, and it is not fair that some individuals put in Rs 1 crore or even Rs 2 crore and more to get a guaranteed return, the senior government official told reporters.

Asked regarding concerns about rising oil prices, the sources said that oil revenue is revenue for the Centre as well as for states and noted that the share of the Union government is fixed while that of states increases when the basic price of petrol and diesel rises.

Calling for the inclusion of petroleum products under the Goods and Services Tax (GST) in order to relieve customers of the immense tax burden, they said it was for the GST Board, of which all States are members, to decide.

With several opposition parties slamming the cessation in the budget, presented in Parliament on February 1 by Finance Minister Nirmala Sitharaman, the sources pointed out that the revenue, estimated to be about Rs 30,000 crore, could fall in the kitty of the Centre, but the government has already made it clear that the money will be used to raise the Agriculture Produce Marketing Committee (APMC).

‘All this is under the control of states, so it's states who will eventually benefit from the cess,’ they said.

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) has allocated Rs 73,000 crore to the budget, which can still increase as it is basically a demand-driven policy, the sources said. The budgetary forecast for 2020-21 was Rs 61,500 crore, but it was updated after the outbreak of the pandemic to Rs 1.1 lakh crore. The sources expressed optimism that the recovery undergone by the economy over the past few months will be maintained.

The government will adhere to the changes proposed by the budget, they added, adding that the continued flow of foreign direct investment into India represents the strong fundamentals of the economy.

As the GST revenue rose, it was reported that this was due to the pent-up demand induced by the lockout, but month after month, the GST receipt was high, so were the car sales, the sources said. Asked about the criticism from RSS affiliates of some of the budgetary initiatives, including the privatisation drive, official sources said they had not received any such feedback.