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‘Cess’ in the budget to fund vax launch? | India News

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NEW DELHI: There is growing debate about introducing a ‘vaccine cessation’ in the Union budget to fund the launch of the Covid-19 vaccine at a time when revenues are under pressure and there is growing demand for funds , even for a higher defense assignment.
With the economy showing signs of returning to normal, things have started to improve on the revenue side, after lows in the first quarter, but the government is closing the year with a fiscal cleanup lower than budgeted. There is pressure on resources amid demands for higher spending to accelerate economic activity, especially in infrastructure and other job-generating sectors. The Center has also decided to shoulder the burden of the vaccine bill, at least in the initial round, putting additional pressure on finances. Certain estimates have pegged the bill for the vaccine at more than Rs 60 billion. The initial order of 11 million shots, for which orders have been placed, is estimated to cost around Rs 220 million and will be financed through the PM Cares Fund.
During the confinement, there were suggestions, even from tax officials, to impose a tax or a surcharge on income to finance the tax deficit, but the Ministry of Finance rejected them, arguing that it was not the right time given the fall in the levels of income. income.
He opted to increase excise duties on gasoline and diesel, and states followed suit not only with gasoline but also with liquor. While taxes on alcoholic beverages have been reduced, the Center has refused to reduce excise duties on automobile fuel, which is now sold at record levels. With the resumption of economic activity, a section of the government and tax advisers are not averse to a small tax in the name of vaccines. “A 1-2% reduction in revenue may not have a key impact,” said a consultant for a leading company. Also in the past, the government had resorted to imposing a health tax.
While it abolished taxes and surcharges on indirect taxes, the government has retained offsetting rights on so-called luxury and sin goods such as coal and tobacco to make up for states’ losses due to the deployment of the GST.

Times of India

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