Whether you access Facebook or what’s app or even twitter, the latest round of jokes seemed to be Swachh Bharat Cess. So what is this cess that has begun being levied on services since November 15? The question is would it bring about a distinct change in implementation of Modi Government’s pet project, the Clean India campaign, a sanitation drive that had been aimed at improving the living standards in both rural and urban India?
Well the SBC or the Swachh Bharat Cess is an additional 0.5% cess that is being levied on all services. Ostensibly this amount is being raised to bring about a more focussed implementation of the Govt’s sanitation initiative which has seen significant funding by the centre thus far. In the current financial year a;lone, the Govt has allocated Rs 3625 crores for Swachh Bharat Mission, this is 27% higher than what was earmarked in the previous fiscal.
However even without getting into the debate on whether this is a good policy or if it was timed correctly, this additional cess is a big thumbs down for me both from the economic perspective as well as the final targeted results from it.
First and foremost on the economic aspect I feel it is rather ill-timed, especially in a situation where the Govt is working overtime to get the states to consent to a uniform GST. While on the one hand the Govt is trying to embrace a neutral taxation policy, the SBC is going to have a cascading effect on the overall tax policy and make services increasingly expensive for the end users. Therefore it will also have a potentially inflationary impact.
On to the next issue now, would generating these additional funds guarantee that the Swachh Bharat Mission will be implemented effectively? I think the focus needs to be on that aspect. As the initiative to set up toilets across rural India has indicated, just funding and fund allocation alone cannot guarantee success of implementation. Policy lapses, wide spread corruption and general apathy ensured that the toilets existed more on paper than in reality!
The need of the hour is to remove these implementation roadblocks and ensure a smooth rollout of the Sanitation drive if they want to achieve success in it at all.