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A whopping Rs 1100 crore has been collected in the past one-and-a-half month under the Swachh Bharat Cess (SBC) that came into effect recently in November, 2015

Junaid Kathju
Publish Date: Feb 20 2016 6:06PM | Updated Date: Feb 20 2016 6:54PM

SWACHH BHARAT : The Cess Messfile : photo

Junaid Kathju discusses the gap between the considerable cess already collected for the Swachh Bharat programme and its utilisation, given the poor history of efficient use so far of myriad kinds of for different purposes 


At a time when the Government is preparing to impose further levies for its Swachh Bharat Abhiyan or clean India programme in its next budget session, already a whopping Rs 1100 crore has been collected in the past one-and-a-half month under the Swachh Bharat Cess (SBC) that came into effect recently in November, 2015.


The Swachh Bharat Mission was launched by the Prime Minister Narendra Modi on 2nd October, 2014 to achieve the vision of making India clean. On 15th November 2015, the Government imposed an additional 0.5 percent Swachh Bharat cess on taxable services to fund the cleanliness programme. 


Even though it is yet to be calculated how much of the collected amount has been utilised but the beginning has been overwhelming so far. As per the estimation, the imposition of the Swachh Bharat cess is likely to bring in Rs 3,800 crore to Government’s kitty by the end of the current financial year. The Government also expects to collect around Rs 10,000 crore through the cess in 2016-17.  


“We have managed to collect Rs 1100 crore under SBC in just 45 days. It is a great start and we hope that with more funds raised, we will be able to achieve our target,” said Joint Secretary, Revenue in the Finance Ministry, Amitabh Kumar. 


As per estimates prepared by the Ministries of Urban Development and Rural Development, Rs 2 lakh crore will be spent on the Mission over the next five years. The expenditure in rural areas is being pegged at Rs 1.34 lakh crore and in urban areas at Rs 62,010 crore. Apart from this, spending on school toilets is put at Rs 2,528 crore, Anganwadi toilets at Rs 768 crore and individual toilets under the rural employment programme at Rs 24,000 crore.


Swachh Bharat Mission Director Nipun Vinayak told Policy Pulse that so far they have received Rs 6500 crore in the current fiscal year and most of the funds are already exhausted.


“Apart from last payment of Rs 2400 crore which is yet to come, most of the funds are disbursed. In fact, States have spent much more than what was given as Centre’s share and work is in full momentum in all the states,” Vinayak said. 


The share funding to implement the programme is 60:40 between Centre and State. It is 90:10 in hilly states.


According to the study released on the occasion of World Toilet Day on 19th November 2015, India has 60.4 percent people without access to safe and private toilets. Over 3.5 million toilets built earlier are not being used due to lack of behavioural change. More than 140,000 children younger than five years die each year in India due to diarrhoea caused by open defecation.


Vinayak said that the District Collectors and representatives of Panchayats are being trained to effectively disseminate the menace of open defecation. “It will take some time for people, especially in rural areas, to get used to the proper toilets.”


Under the programme, about 8.84 crore toilets will be built in rural areas. Besides construction of toilets, the other components of the campaign include eradication of manual scavenging, solid waste management and converting waste into wealth.


As per the latest data, till 10th of August, 2015, more than 73 lakh toilets were already constructed in different states of the country with West Bengal, Chhattisgarh and Rajasthan being the leading states, while Uttar Pradesh and Bihar being the laggard ones. 


In urban India, Swachh Bharat Mission is also being implemented in all the 4,041 statutory cities and towns in the country with an estimated cost of Rs 62,009 crore. Out of this, the share of the Government of India is Rs 14,643 crore on achieving physical targets that include - construction of 1.04 individual household toilets, over 5.00 lakh community and public toilet seats and assisting urban residents in solid waste management including 100 percent door-to-door collection, transport and disposal of municipal solid waste.


More cess 


If reports are to be believed, the Government is giving a serious thought of applying more levies on taxable services to pool in more money to expedite the work on Swachh Bharat Abhiyan Programme.   Reports suggested that measures under consideration include a 0.5 percent cess on petrol, diesel and telecom services, a 1 percent cess on accumulated waste produced by mineral generation plants and a 0.5 percentage point increase in service tax. 


Reports further suggest that the proposals have been made by Niti Aayog and if it finds favour with the Finance Ministry, an announcement to this effect could be made in this month’s or February budget.


Gloomy history  


Imposing cess is not a new initiative in the country. The Swachh Bharat Cess is the latest addition to the growing list of cess collected by the Government for various purposes. However, a significant part of the cesses have remained unutilised or have been diverted for other purposes, as the table shows.


The comptroller and auditor general (CAG), in its report on the Union Accounts for 2014-15, has stated that the cess to the tune of around Rs 3 lakh crore collected from various programmes have either been diverted to other users or simply remained unutilised.


According to CAG, between 2002-03 and 2014-15, the department of telecom collected Rs 66,117 crore towards the Universal Service Obligation (USO) fund but spent only Rs 26,983 crore for the purpose. More than Rs 39,134 crore was not even transferred to the USO fund and may have been diverted for other purposes. 


Similarly, the Government collected Rs 4,900 crore towards the Research and Development cess between 1996-97 and 2013-14, of which only Rs 542 crore was utilised towards the objectives. On the development of the tea sector 100 percent of the funds collected under the cess remained unspent for 2014-15 while close to 80 percent of the cess collected for research and development also remains unutilised.


If one goes with such a track record vis-a-vis spending amounts collected through cess, it raises serious questions on whether the Swachh Bharat cess would be utilised for the specified purpose. 


Experts’ view


A renowned commentator on economics Akash Jindal believes that extracting more money from common people under the garb of cess is a bad idea. 


“In a current scenario when our economy is in tatters, putting extra burden on the pockets of common people is not a wise decision. People are disgruntled with the Government and levying cesses and surcharges are making things worse,” Jindal said.


Jindal feels that to finance the Swachh Bharat Mission, the Government should focus on industrial growth in order to raise the Gross Domestic Product of the country that would ultimately generate more tax.


“Instead of imposing more levies on already taxable services, the Government should create new ventures to collect tax in order to carry forward its dream of clean India. Swachh Bharat is the need of the hour but it cannot be done at the expense of common people who are already toiling hard to make ends meet,” he said.