Budget 2021 may propose one-time Covid-19 relief cess

Union Budget 2021 may propose one-time Covid-19 relief cess

Finance Minister Nirmala Sitharaman. Credit: PTI Photo

A one-time Covid-19 relief cess of up to 2% to garner revenues for post-pandemic reconstruction of economy may be proposed in the Union Budget for 2021-22, as the Centre scrambles to raise revenues for unprecedented expenditures arising this year.

It is under active consideration of the finance ministry and most likely to be approved, sources in the know said.

The Covid cess may be imposed on taxable income of above Rs 10 lakh in addition to the existing 2% cess for health and education. This could raise an estimated Rs 12,000 crore.

The cess was first mooted by the Indian Revenue Service (IRS) Organisation in a policy paper late last year. After that, economists and doctors too urged the Centre to levy such a cess on tobacco products like cigarettes and bidis, saying it could raise revenues up to Rs 50,000 crore.

The cess will be used for funding additional expenditure arising out of the pandemic, including that on vaccines, sources said.

Finance Minister Nirmala Sitharaman, who has promised to present a "Budget like never before", is likely to increase expenditures substantially on healthcare and health infrastructure among other things.

The Budget this year will be a complete paperless exercise as the ministry plans to print no Budget document and make it an absolute digital exercise.

"Covid has changed many things... the finance ministry's approach to Budget-making too,” said an official.

Due to social distancing norms, the ministry will, for the first time, not print a single copy of the voluminous Budget documents.

The traditional halwa ceremony — which marks the beginning of Budget printing process by locking certain key printing officials into the basement of the ministry until the Budget documents get sealed — may also not take place.

Though the ministry had stopped delivering printed version to media and others, it used to give it to the members of Parliament. This year, even they will have to make do with soft copies.

The Budget papers have a set of 14 documents, including the finance minister’s speech copy. The Budget will be available on www.Indiabudget.gov.in or www.indiabudget.nic.in as soon as the speech is over.

Sitharaman is set to present a crucial Budget, which will not only give projections about next one year but also about a decade that could reshape the economy post pandemic.