Agriculture infra cess may hit state revenues
basic custom duty and excise and special excise duties on these items.
“Consequent to imposition of AIDC on petrol and diesel, the basic excise duty and special additional excise duty rates have been reduced on them so that overall consumer does not bear any additional burden,” said the budget papers.
During a post-budget press interaction, revenue secretary Ajay Bhushan Pandey said the Centre expects to collect ₹30,000 through the AIDC.
This implies that states stand to lose their share—about 41% of customs duties collected, as per the 15th Finance Commission recommendation.
“A cess is only fit for timebound targets and not for something as generic as agriculture infrastructure; besides, it should come with a sunset clause,” said Pronab Sen, former chief statistician.
“States are certainly not going to like this since they will lose their share of customs duties collected by the Centre,” added Sen.
According to Sen, the Centre does not share the central excise duties on fuel with states, so the cess on petrol and diesel is revenue neutral for states.
The AIDC is part of the government’s thrust to improve post-harvest management of crops which include better facilities at the farm-gate and at wholesale markets, and improved storage and processing capacities.
In May last year the government announced a ₹1 trillion agriculture infrastructure fund. According to the Economic Survey released last week, about ₹3,000 crore was sanctioned (in-principle) under the scheme till 15 January.
Expectations:
The Centre should announce a ₹3,000 per quintal MSP for wheat and paddy so that recommendations of the MS Swaminathan Commission of 50% profit on the cost of cultivation are truly implemented. The Centre should waive the entire debt of farmers to restore farmers’ faith in the government, cover more farmers under the Kisan Nidhi Yojana and increase yearly support from ₹6,000 to a respectable amount.
Outcome:
“The government’s announcement has saddened me as there’s nothing for the farmer. Payment made to farmers on purchase of foodgrain and other crops is not an achievement. A large number of farmers are protesting on the borders of Delhi and the government has lost another opportunity to pacify them. For rural infrastructure, ₹40,000 crore is too less. The government’s announcement of doubling farm incomes by 2022 seems far-fetched”.