'Cess introduced in budget will boost states' agri infra'

'Cess introduced in budget will boost states' agri infra'
New Delhi, Feb 16 () The agri cess introduced in the Union Budget 2021-22 will finally go towards boosting APMC mandis and related farming infrastructure, all of which are governed by states, a top government functionary said on Tuesday, rejecting criticism that the cess deprives states of revenue as its receipt entirely falls in the Centre's kitty.

Official sources also justified the introduction of tax on EPF's interests in accounts where employees' share is more than Rs 2.5 lakh per annum, noting that many people parked money in crores to get an assured return of over 8.5 per cent.


They asserted that the measure will impact only one per cent of total account holders.

The Employees' Provident Fund (EPF) is essentially for workers and those who are dependent on it, and it is not fair when some people are putting in Rs 1 crore or even Rs 2 crore annually to get an assured return, the senior government official told reporters in an off-the-record interaction.

Asked about concerns over rising petroleum prices, the sources said oil revenue is income for the Centre as well as states and noted that the Union government's share is fixed while that of states rise when the basic price of petrol and diesel go up.

On the demand that petroleum products should be brought under the Goods and Services Tax (GST) to relieve consumers of huge tax burden, they said it is for the GST Council, of which all states are a member, to decide.


With many opposition parties slamming the introduction of cess in the budget, presented by Finance Minister Nirmala Sitharaman on February 1 in Parliament, the sources pointed out that the revenue, expected to be around Rs 30,000 crore, may fall in the Centre's kitty but the government has already made it clear that the money will be used to boost Agriculture Produce Marketing Committee (APMC) mandis and related infrastructure.

This all falls under states' control, so it is states which will finally gain from the cess, they said.

While the budget has allocated Rs 73,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), this can always go up as it is essentially a demand-driven programme, the sources said.

With a large chunk of migrant workers, who had returned home during the COVID-19-induced lockdown, gradually returning to their cities of work, the demand for MGNREGA may not be as high in the coming fiscal, they added.

The budgetary estimate for 2020-21 was Rs 61,500 crore but it was revised to Rs 1.1 lakh crore following the pandemic's outbreak.


The sources expressed confidence that the recovery the economy has witnessed in the last few months will be sustained, and India will remain one of the fastest growing nations in the coming years.

The government will stick to the reforms that the budget envisages, they said, noting that the sustained Foreign Direct Investment influx into India is a reflection on the country's strong fundamentals.

When the GST revenue surged, it was claimed that this is due to the pent up demand caused by the lockdown but the GST receipt has been strong month after month, so has been the auto sales, the sources said.

Asked about the criticism of some of the budgetary measures, including privatisation push, from RSS affiliates, the official sources said they had not received any such input. KR ANB ANB

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