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Major part of cess money is unspent

NewsMajor part of cess money is unspent

A major chunk of tax collected under research and development (R&D) cess, clean energy cess, and secondary and higher education cess is still unspent, according to Comptroller and Auditor General (CAG) report 2016-17.

A cess imposed by the Central government is a tax on tax, levied by the government for a specific purpose. Generally, a cess is expected to be levied till the time the government gets enough money for that purpose. According to the CAG report 44, which was published in December 2017, the total amount of cess collected between 2012-13 and 2016-17 was Rs 1,72,168 crore, roughly 30% more than what was collected in the previous years.

The CAG report 44 said, “It was observed that R&D cess, meant for encouraging indigenous investment in technology amounting to Rs 7,885.54 crore, was collected during the period 1996-97 to 2016-17, out of which, Rs 609.46 crore (7.73%) was disbursed to the Technology Development Board (TDB) as grants-in-aid during the same period. In 2016-17, against a total collection of Rs 1,187.24 crore, only Rs 30.30 crore, viz 2.55% was given as grant to the TDB. Despite the matter of under utilisation is usual the levy of cess at the rate being collected had been raised in previous years,” The R&D cess, which is administered by the TDB, was introduced in 1986 to encourage commercial application of indigenously developed technology.

According to CAG reports, India spends less than 1% of its GDP on R&D. The secondary and higher education cess, which was introduced in 2007, and amounts to Rs 64,228 crore, has not been spent at all. “Unlike the creation of Prarambhik Siksha Kosh in the case of primary education cess, no schemes were identified for the distribution of secondary and higher education cess (SHEC). Consequently, the commitment of furthering secondary and higher education cess as envisaged in the Finance Act was not transparently ascertainable. A total Rs 53,967.23 crore was collected as clean energy cess between 2010-11 and 2016-17. Against this, only Rs 15,483.21 crore (28.69%) had been transferred,” the CAG report said.

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