Budget Introduces Agriculture Infrastructure And Development Cess (AIDC)
Agriculture Infrastructure & Development Cess (AIDC), has been introduced in the Budget 2021-22 to aid the agri sector.
The cess is not uniform and varies from product to product.
Proposed Agriculture Cess
|Items||Cess (In %)|
|Gold, Silver and Dare Bars||2.5|
|Crude Palm Oil||17.5|
|Crude Soyabean and Sunflower Oil||20|
|Coal, Lignite and Peat||1.5|
|Specified Fertilizers (Urea etc.)||5|
|Bengal Gram/Chick Peas||50|
|Cotton (Not Carded or Combed)||5|
Need for the Cess
There is an immediate need to improve agricultural infrastructure to produce more, while also conserving and processing agricultural output efficiently. This will ensure enhanced remuneration for our farmers.
Impact of this Cess on Common Citizen
- Overall, AIDC is not expected to affect a common citizen in any major way. The Govt. has taken up few balancing acts in this regard:
- Petrol & Diesel
- The Union Budget has imposed an Agriculture Infrastructure and Development Cess (AIDC) of Rs 2.5 per litre on petrol and Rs 4 per litre on diesel. But, these will not result in any additional burden on consumers.
- The reason for it is that unbranded petrol was earlier attracting a basic excise duty (BED) of Rs 2.98 and a special additional excise duty (SAED) of Rs 12 per litre. These have now been reduced to Rs 1.4 and Rs 11 per litre, respectively.
- Similarly, the BED on unbranded diesel has been cut from Rs 4.83 to Rs 1.8 and the SAEC on it from Rs 9 to Rs 8 per litre. So, the overall excise incidence on petrol (BED+SAEC+AIDC) will now be Rs 14.9/litre, which was previously Rs 14.98, while that on diesel is Rs 13.8 (earlier Rs 13.83).
- Alcoholic Beverages
- A similar readjustment has been made for alcoholic beverages that currently attract 150 per cent basic customs duty. That basic import duty has now been slashed to 50 per cent, even as the Budget has proposed an AIDC of 100 per cent.
- Gold & Silver Dore Bars
- Gold & Silver Dore bars (2.5%) is one of them. But customs duty has come down by 5% for Gold and Silver imports. Thus there may not be any impact on this front.
- There are other items like Apples, Crude palm oil, crude soyabean oil, peas, kabuli chana , Bengal gram etc. on which AIDC is being imposed. There is also custom duty hike in case of cotton to 10% and on raw silk and silk yarn to 15% from 10%.
Vote On Account
Why is it in News?
In the election year, the outgoing government either presents an Interim Budget or seeks ‘Vote on Account’.
What is Vote on Account?
- The constitution says that no money can be withdrawn by the government from the Consolidated Fund of India except under appropriation made by law. For that an appropriation bill is passed during the budget process.
- However, the appropriation bill may take time to pass through the Parliament and become a law. Meanwhile, the government would need permission to spend even a single penny from April 1 when the new financial year starts.
- Vote on Account is the permission to withdraw money from the Consolidated Fund of India in that period, usually two months (it is generally 1/6th of the total Budget Amount).
- Vote on Account is a formality and requires no debate.
- When elections are scheduled a few months into the new financial year, the government seeks vote on account for four months.
- Essentially, vote on account is the interim permission of the parliament to the government to spend money.
- So vote on account is just an interim permission to spend money as against a full budget which is an elaborate financial statement of expenditure and receipts including changes in taxes and government policies.
Source: Economic Times