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<keyword id="19896018" type="General" weightage="20" keywordseo="kerala" source="keywords">Kerala</keyword> Chief Minister <keyword id="19901169" type="General" weightage="20" keywordseo="pinarayi-vijayan" source="keywords">Pinarayi Vijayan</keyword> on Thursday said that the cess and surcharge levied by the Centre was showing a "rising trend" and resulting in "shrinkage" of states' share in the divisive pool of taxes. Vijayan said the rise in surcharges and cesses, which are not included in the divisive pool, was happening at a time when the <keyword id="20015455" type="General" weightage="100" keywordseo="finance-commission" source="keywords">Finance Commission</keyword> has been recommending a higher share for the states from the net proceeds of the taxes collected by the Centre. Vijayan was speaking at a conclave of five non-BJP-ruled states organised by Kerala to discuss the key issues related to the 16th <keyword id="25455" type="General" weightage="20" keywordseo="finance" source="Orion">Finance</keyword> Commission. He said that the 16th Finance Commission needs to factor in this rising trend in surcharges and cesses, when it recommends the prescribed share of the states from the net proceeds of taxes collected by the union government. The CM further said that the share of the states in the divisive pool needs to be increased further from the 41 per cent recommended by the <keyword id="23137017" type="General" weightage="20" keywordseo="last-finance-commission" source="keywords">last Finance Commission</keyword>. He said that Kerala and many other states have made this demand in the past with the southern state suggesting that it be increased to 50 per cent. "The demand for a higher share for the states in the taxes collected by the Union is having continued relevance and it is my request to the eminent scholars and colleagues who are here to formulate this in a concrete manner," Vijayan said. "This will help the states to make an effective case before the 16th Finance Commission for raising the share of taxes which are distributed to the states, in view of the widening vertical fiscal Imbalances."

Rise in cess, surcharge shrinking states' share in divisive pool of taxes: Kerala CM

India's government <keyword id="21309215" type="General" weightage="20" keywordseo="healthcare-spending" source="keywords">healthcare spending</keyword> appears to be on the rise, but a closer look reveals a concerning trend. While the headline figures might suggest an increase, the reality is a steady decline in health expenditure as a proportion of both the <keyword id="19936553" type="General" weightage="20" keywordseo="budget" source="keywords">budget</keyword> and GDP over the past five years (2018-19 to 2023-24). This decline is even starker when adjusted for inflation. In real terms, spending has barely kept pace since 2019-20. As a percentage of the total budget, health spending has shrunk from 2.4% in 2018-19 to just 1.9% in 2023-24. Similarly, the share of GDP allocated to health has fallen from 0.30% to 0.28%, as per a report from the Times of India. <h2>Growing expectations ahead of <keyword id="15478236" type="General" weightage="20" keywordseo="budget-2024" source="Orion">Budget 2024</keyword></h2>As the Finance Minister <keyword id="19916618" type="General" weightage="20" keywordseo="nirmala-sitharaman" source="keywords">Nirmala Sitharaman</keyword> prepares to present the full budget for the current fiscal on July 23, the expectations from the health sector has only been growing. “The Union Budget 2024-25 is a pivotal moment for India's healthcare sector. Building on the ₹64,180 crores allocated in 2023-24 under the Pradhan Mantri Atmanirbhar Swasth Bharat Yojana, we need enhanced tax incentives and financial support for healthcare startups to catalyze innovation. Significant investments in <keyword id="21226679" type="General" weightage="20" keywordseo="digital-health-infrastructure" source="keywords">digital health infrastructure</keyword>, particularly AI, will improve patient outcomes and operational efficiency,” says Dr Sravani Reddy G, Founder &amp; CEO, Soprav Healthcare Consulting. “Strengthening public-private partnerships will improve healthcare accessibility and quality, leveraging private sector efficiency. Additionally, focused efforts on affordability and access, such as reducing out-of-pocket expenses and improving insurance coverage, are vital for a more equitable healthcare system.” “The healthcare sector in India is on the brink of excellence. There is an increased focus on treating unique patient cases, robotic surgeries, and increasing prominence of AI for accurate diagnosis. To reach the next phase, emphasis must be laid on innovation, research &amp; development, and infrastructure development. These are the foundations for India’s health sector to achieve an international standard of treatment for all,” hopes Joseph Pasangha, Group COO, SPARSH Hospital, Bengaluru. <div type="Article" hostid="261" msid="111730426" title="Pan-India rollout of U-WIN to track routine immunisations likely by Aug end" mstype="2" mssubtype="0"></div> <h2>Health tax not helping enough </h2>This situation is further complicated by the introduction of the <keyword id="22446013" type="General" weightage="20" keywordseo="health-cess" source="keywords">health cess</keyword> in 2018. This tax levy was intended to boost government spending on healthcare, particularly for the underprivileged. However, the collected funds seem to be merely filling the gap created by cuts to regular budgetary allocations for health. In 2022-23, over Rs 18,300 crore of the central government's health spending came from the health cess. Excluding this amount, the actual budgetary allocation for health stands at a concerning Rs 59,840 crore. This is lower than the pre-pandemic level of Rs 66,042 crore allocated in 2019-20, even without adjusting for inflation. <h2>Where's the money going?</h2>The intended purpose of the health cess seems to be falling short. In 2018, health spending accounted for 2.4% of the government's total expenditure. If this ratio had remained constant in 2023-24, the health budget should have been over Rs 1.07 lakh crore. Instead, the revised expenditure, including the health cess, stands at just Rs 83,400 crore. Even the additional allocations for the COVID-19 pandemic (Rs 10,655 crore and Rs 15,955 crore in 2020-21 and 2021-22 respectively) cannot mask the overall decline. When combined with the regular health budget (excluding health cess), the total spending in these years still falls short of what it would have been if the 2.4% share of 2018-19 had been maintained. <h2>More for alternative medicine</h2>While the share allocated to Ayush (Ayurveda, Yoga &amp; Naturopathy, Unani, Siddha and Homeopathy) has seen a significant increase, spending on crucial areas like health research has seen only marginal growth. Additionally, a major portion of research funding goes to the Indian Council of Medical Research, with only a temporary increase during the peak of the pandemic response. The most concerning decrease is in the allocation for health and family welfare, encompassing national programs, the National Health Mission, and health system strengthening. This critical area has seen a substantial decline in its share of both GDP and total budget expenditure, falling from a peak of over 2% in 2017-18 to a mere 1.7% in 2023-24. Excluding the health cess, this figure drops even further to 1.5%. <h2>What this means</h2>This decline in government health spending raises serious concerns about India's commitment to public healthcare, particularly for its most vulnerable populations. Increased investment in health is crucial for a growing nation like India, and a reversal of this downward trend is essential to ensure accessible and quality healthcare for all. The 2024 Interim Health Budget saw a boost in total healthcare expenditure from Rs. 79,221 crore to Rs. 90,171 crore. Experts have opined that The healthcare budget should encompass at least 2.5% of the total budget. But it remains to be seen how the exact picture will turn out to be on July 23. “The 2024-25 budget presents an opportunity to build on past successes while addressing shortcomings, ensuring that India's healthcare system remains resilient, innovative, and patient-centric. This budget can pave the way for a healthier, more equitable future for all," concludes Dr Reddy. (With inputs from TOI) <div type="Article" hostid="261" msid="111689743" title="Union Budget 2024: A handy FAQ guide to decode the upcoming budget" mstype="2" mssubtype="0"></div>

Despite pandemic and growing health scares, India’s budget share for healthcare continues to decline

No COVID-cess but agri infra cess will hike prices of fuel, imported alcohol

<ul><li>The government is considering a <keyword id="9126471" type="UNKNOWN" weightage="20" keywordseo="covid-cess">COVID cess</keyword> to help increase revenue ahead of <keyword id="8420431" type="UNKNOWN" weightage="20" keywordseo="budget-2021">Budget 2021</keyword>. A call on the new cess or surcharge is likely to be taken in the coming weeks.</li><li>According to an ET <a href="https://economictimes.indiatimes.com/news/economy/finance/taxed-by-covid-govt-mulls-covid-cess/articleshow/80205285.cms">report</a>, preliminary talks on revenue-raising measures include a cess on high income earners, as well as additional levy on fuel. </li><li>States have been facing pressure in revenues because of economic slowdown and corporate tax cuts, which means that the government is stretched to meet its spending needs.</li><li>The first phase of <keyword id="8763838" type="UNKNOWN" weightage="20" keywordseo="covid-19">COVID-19</keyword> vaccine rollout will cost the government ₹21,000 to ₹27,000 crore.</li></ul>Ahead of Budget 2021, India is mulling imposition of an additional COVID cess or surcharge on high income earners. This could be to meet the increased expenditure due to the pandemic and the upcoming vaccination drive. According to an ET <a href="https://economictimes.indiatimes.com/news/economy/finance/taxed-by-covid-govt-mulls-covid-cess/articleshow/80205285.cms">report</a>, preliminary talks on revenue-raising measures include a cess on high income earners, as well as additional levy on fuel. A call on the new COVID cess will likely be taken closer to February 1, when the budget is scheduled to be announced. If the government implements the COVID cess, it will be the latest in line of measures to boost revenue at a time when it has implemented several policies that either reduce government collections or increase its spendings. <div type="image" title="GST Collections 2020" msid="80208527" hostid="261" caption="&amp;lt;p&amp;gt;GST collections plummeted during peak of COVID-19&amp;lt;/p&amp;gt;"></div> States have been facing pressure in revenues because of economic slowdown and corporate tax cuts, which means that the government is stretched to meet its spending needs. Goods and services tax (GST) collections have also struggled for a good part of 2020, in large part due to the pandemic and lockdown. Further, India’s growth rate is <a href="https://www.businessinsider.in/policy/economy/news/fy21-gdp-advance-estimates-see-indian-economy-contract-by-7-7-due-to-covid-19-pandemic/articleshow/80154658.cms">expected</a> to contract by up to 7.7% while fiscal deficit is projected to rise. As per a PTI <a href="https://www.businessinsider.in/budget/news/fiscal-deficit-touches-135-1-pc-of-fy21-target-at-november-end/articleshow/80046874.cms">report</a>, India has already crossed 135% of its fiscal deficit targets for FY21 in December. <div type="image" title="India&amp;#39;s fiscal deficit" msid="80208556" hostid="261" caption="&amp;lt;p&amp;gt;&amp;lt;sub&amp;gt;India&amp;#39;s fiscal deficit since 2009-10&amp;lt;/sub&amp;gt;&amp;lt;/p&amp;gt;"></div> According to the ET report, the preliminary discussions have revolved around a cess on high-income earners along with some increase in indirect taxes. There has also been a proposal to add a cess to excise on petrol and diesel on top of custom duties. A cess is a good way for the centre to raise funds as central cess collections are not shared with the states. <div type="Article" hostid="261" msid="80146505" title="Petrol price is now past ₹84 in Delhi, over 62% of it is taxes" mstype="2" mssubtype="0"></div> The industry in its recommendations on the budget has asked that no new taxes should be levied as the economy is already under stress due to the pandemic. Experts too agree that the timing is not right. The Indian Revenue Service Association (IRSA) had last year <a href="https://www.businessinsider.in/finance/news/the-super-rich-in-india-may-face-wealth-tax-and-one-time-covid-19-relief-cess-of-4/articleshow/75388641.cms">suggested</a> the imposition of a one-time COVID relief cess on the super-rich to raise funds amid the pandemic. COVID-19 vaccine rollout to cost ₹56,000 to ₹72,000 crore As per an SBI Research <a href="https://www.businesstoday.in/current/economy-politics/phase-1-vaccination-to-cost-rs-21000-27000-crore-to-govt-sbi-research/story/427382.html">report</a>, the first phase of the COVID-19 vaccination drive that begins from <a href="https://www.businessinsider.in/india/news/covid-19-vaccination-drive-to-kick-off-in-india-on-january-16-says-health-minister/articleshow/80188100.cms">January 16</a> will cost the government ₹21,000 to ₹27,000 crore. The second phase is expected to cost an additional ₹35,000 to ₹45,000 crore. The government intends to vaccinate 30 crore people in the first phase and an additional 50 crore people in the second phase. While the cost of vaccines will be borne by the central government, the state governments will bear distribution, personnel training and logistic costs. Jharkhand has imposed a <a href="https://www.thehindubusinessline.com/companies/covid-cess-tata-steel-moves-sc-against-jharkhand-govt/article33365872.ece">COVID cess</a> on minerals and Punjab, Haryana and Delhi have imposed additional taxes on liquor to meet the increased expenditure and reduced revenues. SEE ALSO: <a href="https://www.businessinsider.in/budget/news/various-taxes-may-rationalize-in-aviation-sector-in-budget-2021/articleshow/80186028.cms">Various Taxes may rationalize in Aviation Sector in Budget 2021</a> <a href="https://www.businessinsider.in/policy/economy/news/union-budget-2021-22-manufacturing-atmanirbhar-bharat-healthcare-can-be-main-themes/articleshow/80044041.cms">Atmanirbhar Bharat, manufacturing and healthcare may be central themes in India's budget for next year</a> <a href="https://www.businessinsider.in/finance/news/the-super-rich-in-india-may-face-wealth-tax-and-one-time-covid-19-relief-cess-of-4/articleshow/75388641.cms">The super rich in India may face wealth tax and one-time COVID-19 relief cess of 4%</a>

India may be considering a COVID cess on high income earners — aside from more levy on fuel

New Delhi, Feb 2 () Farmers' body FAIFA on Sunday sought roll back of the proposal to levy additional duty on cigarettes, saying the hike in tax will have an adverse impact on the livelihood of already struggling tobacco growers.
While presenting the Union Budget for 2020-21, Finance Minister Nirmala Sitharaman proposed to increase the National Calamity Contingency Duty (NCCD) on cigarettes, hookah, chewing tobacco, snuff and tobacco extracts and essence.
"The hike in tax is a major set-back to the FCV (Flue Cured Virginia) tobacco farmers who have been fighting torrential and unseasonal rains this year in Andhra Pradesh and Karnataka.
"We did not expect such NCCD hike ..after you (Government) were made aware of our current situation through several representations..," Federation of All India Farmer Associations (FAIFA) said in a statement.
It is unfortunate that the finance ministry has not even responded to many of FAIFA's representations which were submitted personally by the farmers, it added.
"What more can a legal tax paying FCV tobacco farmer can do? It is a death bed to all the FCV tobacco farmers when trusting and relying on Government is not yielding the required results, whereas unorganised sectors like Bidi industry was free of tax burdens," the association said.
Steep increase in taxes on cigarettes has led to increase in illegal trade, including smuggling of such items.
"Tax increases since 2012-13 have led to a 36 per cent increase in illegal cigarette trade, increasing from 19.5 billion sticks in 2011 to 26.5 billion sticks in 2018," FAIFA noted.
It said that the government has already removed export incentives on tobacco, making Indian produce less competitive in the global market.
"This lack of support from the Government is resulting in reduction in crop size and farmers voluntarily exiting the FCV tobacco cultivation. In this backdrop, the present NCCD hike is levied only on tobacco and it is against the fundamental principles of GST, hence we request Hon'ble Finance Minister to reconsider and withdraw the NCCD hike on Tobacco," FAIFA said. MSS
BAL

Withdraw additional cess on cigarettes: FAIFA

A total of 13 states have so far decided on their borrowing options to meet their <keyword id="9933255" type="UNKNOWN" weightage="20" keywordseo="gst-compensation-shortfall">GST compensation shortfall</keyword> and almost all have decided to go for the first option proposed by the Centre, source said. Out of the 13, 12 states have opted for the first option, under which the Union government has offered states that they could borrow the shortfall arising out of GST implementation, estimated at Rs 97,000 crore approximately. The amount would be borrowed through issue of debt under a special window coordinated by the Finance Ministry. The first option is to ensure steady flow of resources similar to the flow under <keyword id="2600993" type="PERSON" weightage="20" keywordseo="GST-compensation">GST compensation</keyword> on a bi-monthly basis. Under this option, the Centre will endeavour to keep the cost at or close to the G-secs yield, and in the event of the cost being higher, will bear the margin between G-secs and average of State Development Loan yields up to 0.5 per cent through a subsidy. The states which have preferred to opt for this option are Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Madhya Pradesh, Meghalaya, Sikkim, Tripura, Uttar Pradesh, Uttarakhand and Odisha. Only Manipur has so far opted for the second borrowing option under which states can borrow the entire compensation shortfall of Rs 2.35 lakh crore, including the Covid-impact portion, through issue of market debt. Six more states -- Goa, Assam, Arunachal Pradesh, Nagaland, Mizoram and Himachal Pradesh -- will be giving their choice in a day or two, said people in the know. A few states have submitted their views to the Chairperson of the GST Council but are yet to decide on the options, according to sources. In the 41st GST Council meeting last month, the Centre had proposed both options, so that a mechanism could be put in place as an exception this year, as Covid-19 disruptions and lower revenue collections have made it difficult for the Centre to meet its obligation on Goods and Services Tax (GST) compensation to states. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-future-retail-ril-irctc-bhel-tata-motors-adani-green-vodafone-idea-godrej-properties-sunteck-realty-and-more/articleshow/78097615.cms">Top stocks to watch— Future Retail, RIL, IRCTC, BHEL, Tata Motors, Adani Green, Vodafone Idea, Godrej Properties, Sunteck Realty and more</a> <a href="https://www.businessinsider.in/india/news/delhi-police-arrests-umar-khalid-connection-with-northeast-delhi-riots/articleshow/78097740.cms">Delhi Police arrests Umar Khalid in connection with Northeast Delhi riots</a> <a href="https://www.businessinsider.in/tech/news/tiktok-owner-bytedance-rejected-microsofts-offer-for-the-apps-us-operations/articleshow/78097018.cms">TikTok owner ByteDance rejected Microsoft's bid for the app's US operations, Oracle reportedly chosen as US 'technology partner'</a>

13 states decide on GST compensation — only Manipur opts for borrowing entire shortfall in one go

<ul><li>The <keyword id="150653" type="ORGANIZATION" weightage="20" keywordseo="Indian-Revenue-Service">Indian Revenue Service</keyword> Association (IRSA) has suggested imposing a <keyword id="46812" type="COMPANY" weightage="20" keywordseo="Wealth-Tax">wealth tax</keyword> on India's super rich, which will include anyone with net wealth greater than ₹5 crore.</li><li>They have also suggested imposing a one-time coronavirus relief cess of 4%.</li><li>According to their report, "super rich have a higher obligation towards ensuring the larger public good".</li></ul>The Indian Revenue Service Association (IRSA) has suggested the imposition of wealth tax on the super rich, with net wealth at least Rs 5 crore and a one-time COVID relief cess of 4 per cent. Titled Fiscal Options &amp; Response To COVID-19 Epidemic (FORCE), the report of recommendations on revenue mobilization amid the coronavirus crisis said that in times like these, the so-called "super rich have a higher obligation towards ensuring the larger public good". The tax officers' body said they can be taxed through two alternative means, for a limited, fixed period -- 3-6 months. It noted that the super rich enjoy a higher capacity to pay with significantly higher levels of disposable incomes compared with the rest. Also, they have a higher stake in ensuring the economy springs back into action, and their current levels of wealth itself is a product of the social contract between the state and its citizens. It suggested raising the highest slab rate to 40 per cent for total income levels above a minimum threshold of Rs 1 crore or re-introduction of the wealth tax for those with net wealth of Rs 5 crores or more. "Most high-income earners still have the luxury of working from home, and the wealthy can fall back upon their wealth to cope with the temporary shock. In view of several European economists, taxing the wealthy would be the most 'progressive fiscal tool', as wealth is far more concentrated than income and consumption," it said. Suggesting the imposition a one-time COVID relief cess, the IRSA said as opposed to surcharges, cess are more broad-based since they relieved on every taxpayer and are likely to mobilize more revenue as well. The current rate of cess is 4 per cent, including 2 per cent health cess and 2 per cent education cess. "Thus, an additional one-time cess of 4 per cent on account of COVID Relief (could be called COVID Relief Cess) could help finance capital investment in COVID Relief work," it said. As per IRSA, the extra revenue mobilised through the additional cess could be between Rs 15,000-18,000 crore. It, however, said that to mitigate the extra hardship on the middle class, the cess may be made applicable only in cases where the taxable income is greater than Rs 10 lakh. The report also suggested increasing the surcharge applicable to the higher income foreign companies having a branch office or permanent establishment in India. It said the surcharge has not been revised for some time now, and with companies operating in India and deriving profits through their PEs, it is time that a flourishing market like India with its huge prospects flexes its customer-base muscle. The tax incentives for CSR should be extended at the time of national disaster, it said. Those companies who are undertaking the COVID relief activities under CSR should be allowed to claim as expenditure incurred for the purpose of business deduction section 37 for FY 2020-21 only. This incentive helps in mobilizing CSR funds for the disaster management, the report said. See also: <a href="https://www.businessinsider.in/india/news/dhfls-kapil-and-dheeraj-wadhawan-taken-into-custody-by-cbi-for-role-in-yes-bank-scam-case/articleshow/75388823.cms">DHFL's Kapil and Dheeraj Wadhawan taken into custody by CBI for role in Yes Bank scam case</a> <a href="https://www.businessinsider.in/india/news/pm-modi-says-indias-fight-against-coronavirus-is-people-driven/articleshow/75387305.cms">PM Modi says India's fight against Coronavirus is 'people-driven'</a> <a href="https://www.businessinsider.in/india/news/lockdown-may-be-extended-in-covid-19-hit-urban-areas-of-maha/articleshow/75386981.cms">Coronavirus lockdown may extend beyond May 3 in urban areas of Maharashtra</a> <a href="https://www.businessinsider.in/entertainment/news/doordarshan-has-plans-to-bring-back-shri-krishna-after-20-years/articleshow/75387419.cms"></a>

The super rich in India may face wealth tax and one-time COVID-19 relief cess of 4%

New Delhi, Feb 1 () Finance Minister Nirmala Sitharaman on Saturday proposed to impose a nominal health cess on import of medical equipment to boost the domestic medical devices sector and generate resources for health services.
 In her second Budget speech, Sitharaman said till a few years back India was dependent on imports for medical equipment. Now, not only is the country manufacturing medical equipment but also exporting them in large quantities.
 Stating that this sector deserves further fillip, she said the government is committed to provide health services to all and Ayushman Bharat has made it possible.
 "To achieve the twin objectives of giving impetus to the domestic industry and also to generate resource for health services, I propose to impose a nominal health cess, by way of a duty of customs, on the imports of medical equipment keeping in view that these goods are now being made significantly in India," Sitharaman said.
 The proceeds from this cess shall be used for creating infrastructure for health services in the aspirational districts, she added.
 "Our policy of Make in India has started giving dividends. India is now making world class goods and exporting such products," Sitharaman said. AKT ABM

You Searched For "cess" and got 8 results

Rise in cess, surcharge shrinking states' share in divisive pool of taxes: Kerala CM

PTI

Despite pandemic and growing health scares, India’s budget share for healthcare continues to decline

Ashmita Gupta

No COVID-cess but agri infra cess will hike prices of fuel, imported alcohol

Prabhjote Gill

India may be considering a COVID cess on high income earners — aside from more levy on fuel

Rounak Jain

Withdraw additional cess on cigarettes: FAIFA

PTI

13 states decide on GST compensation — only Manipur opts for borrowing entire shortfall in one go

IANS

The super rich in India may face wealth tax and one-time COVID-19 relief cess of 4%

IANS

Govt proposes health cess on import of medical equipment

PTI

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