Budget 2021: How will govt fund COVID-19 vaccination? There's a cess coming!

Budget 2021: How will govt fund COVID-19 vaccination? There's a cess coming!

The government held initial talks on revenue-sharing measures, however, a definitive decision will be taken closer to February 1, when the budget is announced

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In the wake of COVID-19 pandemic, the government is mulling the cess or surcharge to finance additional spending ahead of the budgetIn the wake of COVID-19 pandemic, the government is mulling the cess or surcharge to finance additional spending ahead of the budget
BusinessToday.In
  • Jan 11, 2021,
  • Updated Jan 11, 2021 1:01 PM IST

The Centre may announce a coronavirus cess in Budget 2021, scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1.

In the wake of COVID-19 pandemic, the government is mulling the cess or surcharge to finance additional spending ahead of the budget. The government held initial talks on revenue-sharing measures, however, a definitive decision on whether to levy it in the form of a cess or surcharge will be taken closer to February 1, when the budget is announced.

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"Proposal for a cess has been discussed," a source told The Economic Times. Although the industry, in its recommendations, has sought no new taxes as the economy is already under stress, experts have also controverted the idea, saying the timing for such a levy wasn't right.

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Furthermore, the government is also likely to incur additional spending on infrastructure, rural economy and the Atmanirbhar Bharat Rozgar Yojana FY22 to cushion the economy.

The Centre, according to the report, has also favoured a cess to generate funds speedily rather than raising taxes as central cess collections are not shared with states under revenue decentralisation.

The Centre may announce a coronavirus cess in Budget 2021, scheduled to be presented by Finance Minister Nirmala Sitharaman on February 1.

In the wake of COVID-19 pandemic, the government is mulling the cess or surcharge to finance additional spending ahead of the budget. The government held initial talks on revenue-sharing measures, however, a definitive decision on whether to levy it in the form of a cess or surcharge will be taken closer to February 1, when the budget is announced.

Advertisement

"Proposal for a cess has been discussed," a source told The Economic Times. Although the industry, in its recommendations, has sought no new taxes as the economy is already under stress, experts have also controverted the idea, saying the timing for such a levy wasn't right.

Also Read:

Furthermore, the government is also likely to incur additional spending on infrastructure, rural economy and the Atmanirbhar Bharat Rozgar Yojana FY22 to cushion the economy.

The Centre, according to the report, has also favoured a cess to generate funds speedily rather than raising taxes as central cess collections are not shared with states under revenue decentralisation.

Read more!
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