Cess on liquor, cigarettes likely to create education fund

P Vaidyanathan Iyer

The government is considering imposition of a cess on certain luxury items like liquour and cigarettes to create an education fund and fulfill its incomplete agenda of Sarva Shiksha Abhiyaan.

The exact percentage of cess to be imposed has, however, not yet been decided, government sources said. "It can be in the 2-5 per cent range," an official said.

According to the sources, Union minister for human resource development Murli Manohar Joshi has mooted the idea of an education cess in his pre-budget meetings with finance minister Yashwant Sinha. He has also discussed it in his discussions with deputy chairman Planning Commission K C Pant while finalising the Tenth Plan.

Sources said that Joshi's move could hardly attract any political criticism. If the HRD minister has his way, then the forthcoming Budget can see an additional levy on luxury items which could include even high-end cars, they added.

The HRD ministry has projected the budgetary requirements of about Rs 968 billion for the Tenth Plan (2002-07), which is almost four times the allocation of Rs 249 billion during the Ninth Plan.

The ministry's demand comes in the context of the Constitutional amendment relating to making elementary education compulsory for children in the age group 6-14 years.

Sinha too in one of his previous budgets said that the investment in education should be increased to the level of about 6 per cent of the gross domestic product. The present spend on education is, however, only around 2 per cent of the GDP.

In his demand for increased outlay for education, Joshi has said that paucity of funds have often come in the way of investments in the sector.

Areas like providing infrastructure for children in the 6-14 years age group, especially school buildings, teaching and learning material, books, innovative projects, special assistance for girls and effective implementation of mid-day meals schemes require substantial investment, he pointed out.

There were also growing demands in the secondary and higher education sector for vocationalisation of education, providing certain minimum years of education for further employment opportunities, meeting requirements of skilled manpower and expanding information technology on a wide scale, Joshi said.

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