Coffers Filled With Cess Money, Hardly Spent on Targetted Groups

National Democratic Alliance (NDA) government led by the Bharatiya Janata Party (BJP), after coming to power in 2014, introduced a slew of cesses including the Swach Bharat Cess and the Krishi Kalyan Cess to be imposed on all taxable services. The introduction of the various cesses came with a promise that the collected money will be spent for the benefit of targetted groups like farmers, students and construction workers. However, a close look at the central government’s data suggests that the government has failed miserably in spending the money. Interestingly, the Centre retains all of the cess money, as it is not bound to share the money with state governments.

In a reply to a question in the Rajya Sabha, the Centre has stated that it has collected Rs 4,04,341.82 crore in the form of various cesses in three years – between 2014 and 2017. The table, enclosed with the reply, shows that the cess amount collected by the Centre has only increased over the years. The authorities collected Rs 89,117.12 crore, Rs 1,36,629.96 crore and Rs 1,78,594.74 crore in 2014-15, 2015-16 and 2016-17 respectively. But the expenditure remained abysmally low throughout the span of three years. Modi government could only spend Rs 57,765.60 crore, Rs 71,565.88 crore and Rs 1,00,871.53 crore in these three years, respectively. Since it is mandatory to spend this money on the targetted groups, Centre's approach signifies its unwillingness to spend the money.

Mockery of the Targetted Groups

While NDA government has been on a spree to introduce new cesses, it has failed to introduce new schemes and link them with unutilised funds to broaden the scope of the benefits. The reply stated that Centre collected Rs 31,228 crore as Secondary and Higher Education Cess in three years, but it has failed in spending even a single penny of this collected cess.

Commenting on this trend, Vikram Singh, Secretary, Students Federation of India (SFI), termed it a conspiracy to dismantle the existing educational infrastructure. Singh said that unused money could have been used for filling the vacant teaching positions across the country. "We are facing a situation, where 50 per cent teaching positions are lying vacant in the country. Even, the Indian Institute of Technology (IITs) have 31 per cent of the teaching positions vacant," Singh said.

He added that the government did not bother to fulfill its promise of providing smart classes. "The secondary education is also undergoing a crisis. I believe, human resource is a part of the infrastructure. But even if you exclude them, the picture is not pleasant. The welfare hostels meant for the marginalised sections, are crammed with students, where a tiny room is being shared by as many as six students. Now, they are being closed leaving hundreds of students vulnerable in Andhra Pradesh and Telangana," he said.

Similarly, the fund created to promote the efforts of environment conservation remains underutilised. While the government collected Rs 44,186.31 crore in three years, it could only spend Rs 11,266.75 crore – leaving a whopping Rs 32,919.56 crore in its coffers.

Construction Workers Among the Worst Hit

Construction workers constitute the largest part of working force in the country's informal sector. An affidavit, submitted by Comptroller and Auditor General (CAG) in the Supreme Court, suggested that the Centre could not spend even 10 per cent of Rs 29,000 crore collected under the Building and Other Construction Workers (Regulation of Employment and Conditions of Service) Act. 

Rapping the Centre, the Supreme Court had observed that even the amount that has been spent was not spent on the benefits of the construction workers. “We may note that huge amounts have been collected in the region, of Rs 29,000 crore and not even 10 per cent has been spent for the benefit of construction workers. The amounts, whatever has been spent, appear to have been spent for the purposes other than for the benefit of construction workers,” the court said. 

The court added the money has been diverted to central and state welfare boards and for purposes which had nothing to do with the benefits of the construction workers. “The Act is clearly being misused in the sense that the beneficiaries are the construction workers but they are not being given the benefits that they are entitled to in accordance with law but the money collected is being diverted to the Welfare Boards or the State Governments for purposes that have nothing to do with the benefits of construction workers,” the court added.