CEss Pool

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Published: December 25, 2015 1:14:12 AM

Time to ensure that funds reach concerned departments.

Even as the government introduces new levies, like the 0.5% Swachh Bharat cess, a new CAG audit report reveals a disturbing trend: Close to R1.45 lakh crore collected under various cesses over the years are lying unspent. A classic is the 5% Universal Service Obligation Fund cess levied on telecom service providers since April 2002 to help roll-out of services in rural India—almost 60%, or R39,134 crore, has not been transferred. In FY15 alone, of the R7,538 crore raised, only R2,087 crore has been disbursed. Similarly, of the R154,820 crore collected since FY05 as Prarambhik Shiksha Kosh (PSK), only R141,520 crore was transferred from the Consolidated Fund of India, leaving a shortfall of R13,300 crore. The secondary and higher education cess (SHEC) collected R64,228 crore during 2006-2015. But unlike the PSK, neither a fund was designated to deposit proceeds of SHEC, nor schemes identified on which the cess proceeds were to be spent. According to the CAG, the possibility of diversion of funds for purposes not mandated under the Finance Act cannot be ruled out. The National Clean Energy Fund, the R&D Cess, the Central Road Fund and several other dormant funds have R14,500 crore lying unused.

The only bright spot is the road cess, where of the R101,000 crore collected, R99,922 crore has been passed on. In other cases, if funds get diverted from their original purpose, there is reason to worry. The government needs to bring in mechanism to ensure that funds get transferred to the concerned departments on time. Else, there is no point in contributing to such cesses. The problem with a cess is that the earnings are not divisible and the entire amount goes to the Consolidated Fund of India, which then allocates the amount to the concerned ministry. That goes against the concept of cooperative federalism which the BJP government has been promoting.

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