Jaitley's budget proposes 2% cess to clean India by 2019

  • HT Correspondent, Hindustan Times, New Delhi
  • Updated: Feb 28, 2015 23:12 IST

With Prime Minister Narendra Modi’s eyes firmly set on delivering a cleaner country by 2019, the government on Saturday asked Parliament for powers to impose a 2% surcharge on service tax to fund the flagship Swachh Bharat Mission.

“This cess will be effective from a date to be notified. Resources generated from this cess will be utilised for financing and promoting initiatives towards Swachh Bharat,” finance minister Arun Jaitley announced while presenting the 2015-16 budget on Saturday.

This is likely to impact some services. “The suggested cess could increase the effective service tax to 16% which will be a huge cost for the telecom industry,” said Rajan Mathhews, director-general of the cellular operators’ apex body, COAI.

Besides the Swachh Cess, Jaitley also proposed a slew of other tax initiatives for the scheme, including a 100% tax deduction on contributions to the Swachh Bharat Kosh, a special fund set up for contributions to the ‘Clean India’ mission. A similar tax treatment has also been proposed for the Clean Ganga Fund.

Assuring the House that the government would build six crore toilets across India by 2019, Jaitley said, “Swachh Bharat is not only a programme of hygiene and cleanliness but, at a deeper level, a programme for preventive health care, and building awareness.”

For 2015-16, Jaitley earmarked Rs 3,625 crore for the ‘Clean India’ programme.

Of this, Rs 1,000 crore will be spent by the union urban development ministry for building toilets in urban areas.

The rest of the amount is to be spent on rural areas, covering 627 districts across 31 states and union territories.

The government has also proposed to increase clean energy cess from Rs 100 to Rs 200 per metric tonne of coal to finance clean environment initiatives. Excise duty on sacks and bags of polymers of ethylene other than for industrial use is also being increased from 12% to 15%.

It also proposed to exempt common effluent treatment plants from service tax.

The concessions from customs and excise duties currently available on specified parts for manufacture of electrically operated vehicles and hybrid vehicles are being extended by one more year i.e. up to March 31, 2016.

These measures, urban experts said, would go a long way to fund the Rs 1.94 lakh crore program launched by the government last October. The urban development ministry will be spending Rs 62,000 crore over a five-year period to build toilets and solid waste management plant in urban areas, and the rest will go towards improving rural areas.

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