The agri cess introduced in the Union budget 2021-22 will finally be aimed at boosting the APMC mandis and the associated agricultural infrastructure, all of which are governed by the States, a senior government official said this on Tuesday, rejecting criticism that the cess deprives the State of revenue as its receipt falls entirely within the Centre’s kitty.
Official sources also justified the introduction of tax on the interests of EPF in accounts where the share of employees is more than ₹ 2.5 lakh per year, noting that many people parked money in crores to obtain a guaranteed return of more than 8.5%. They argued that only one per cent of the total account holders would be affected by the measure.
In an off-the-record conversation, the Employees’ Provident Fund (EPF) is primarily for staff and those who are dependent on it, and it is not fair when some individuals put in ₹ 1 cr or even ₹ 2 cr to get an assured annual return, the senior government official told.
Asked about concerns regarding rising oil prices, the sources indicated that oil revenues are income for the Center as well as for the States and noted that the share of the Union government is fixed while that of the States is rising when the basic price of petrol and diesel is rising. On the demand that petroleum products should be subject to the Goods and Services Tax (GST) in order to relieve consumers of huge tax burdens, they said that it was for the GST Council, of which all States are members, to decide.
With a number of opposition parties clamoring for a cess in the budget presented to Parliament by Finance Minister Nirmala Sitharaman on 1 February, the sources pointed out that the revenue, expected to be around ₹ 30,000 crore, may fall within the Centre, but the government has already made it clear that the money will be used to boost the Agriculture Products Marketing Committee (APMC) man.
All of this falls under state control, so it is states that are finally going to benefit from the cess, they said. Whereas the budget allocated ₹ 73,000 crore to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), this could always go up, as this is basically a demand-driven programme, according to the sources.
With a large proportion of migrant workers returning home during the COVID-19 lockdown, gradually returning to their cities of work, the demand for MGNREGA may not be as high in the coming fiscal period, they added. The budget estimate for 2020-21 was ₹ 61,500 crore but was revised to ₹ 1.1 lakh crore due to the outbreak of the pandemic.
Sources have expressed confidence that the economic recovery that has taken place in the last few months will be maintained and that India will continue to stay one of the fastest-growing countries in the coming years. The Government will stick to the reforms envisaged in the budget, they stated “, noting that the continued influx of foreign direct investment (FDI) into India is a reflection of the country’s solid fundamentals.
When GST revenue streams rose, it was believed that this was due to the pent-up demand caused by the lockdown, but the GST receipt was high month after month, so was the auto sales, the sources says. Questioned about the condemnation of some of the budgetary measures, including privatization, from RSS affiliates, the official statements said that they had not received any such input.