Lok Sabha Question No. 969 (UNSTARRED), answered on 2021-02-08
Subject: Education Cess
Ministry: FINANCE
Asked by: A. Chellakumar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE

## LOK SABHA UNSTARRED QUESTION NO 969 TO BE ANSWERED ON MONDAY THE 08 TH  FEBRUARY, 2021 MAGHA 19, 1942 (SAKA)

## EDUCATION CESS

969. DR. A. CHALLAKUMAR:

Will the Minister of FINANCE be pleased to state:-

- (a) the details of education cess levied, modus operandi of its allocation and the  amount  collected  on  income  tax  during  the  last  three  years  across  the country;
- (b) whether the Government has utilized the education cess collected so far and if so, the details thereof and if not, the reasons therefor;
- (c)  the  details  of  the  schemes/programmes  identified  so  far  for  utilization  of education cess;
- (d)  whether  the  Government  has  conducted  any  study  for  utilisation  of education cess before imposing it on income tax; and
- (e)  if  so,  the  details  thereof  and  if  not,  the  reasons  therefor  along  with  the other  steps  taken/being  taken  by  the  Government  for  effective  use  of  the corpus collected by the Government through education cess?

## ANSWER THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

- (a) (i) Initially, education cess was levied @ 2% from Financial Year 200405  to  make  available  additional  resources  for  basic  education  and  Mid-Day Meal scheme. Subsequently, from Financial Year 2007-08, an additional cess @1% was levied to fund secondary and higher education and the expansion of  capacity  by  54%  for  reservation  for  socially  and  educationally  backward classes. Further, to take care of the needs of education and health of Below Poverty Line (BPL) and rural families, 'Education Cess' @3% was replaced by 'Health and Education Cess' @4% from Financial Year 2018-19.
- (ii) The allocation of the Cess is as under:

The  total  proceeds  of  Health  and  Education  Cess  are  distributed  as under:-

Primary & Secondary Education

-   60%

Higher Education

-    15%

Health

-    25%

- (iii) Details of Education Cess/ Health and Education Cess collected on Income  Tax  during  the  last  three  years  across  the  country  are  as under:

(In Rs. Crores)

|   S.No. | Financial Year   | Total Amount of Education Cess collected   |
|---------|------------------|--------------------------------------------|
|       1 | 2017-18          | 28,174.09*                                 |
|       2 | 2018-19          | 40,590.57**                                |
|       3 | 2019-20          | 38,430.21**                                |

* Education cess includes Primary Education cess and Secondary & Higher Education cess
- ** From F.Y. 2018-19 Primary and Secondary Education Cess has been changed as Health and Education cess
- (b) Details of utilization of education cess in last three financial years are as under:

(In Rs. crores)

| Financial Year   | Department of Higher Education   | Department of School Education   | Total     |
|------------------|----------------------------------|----------------------------------|-----------|
| 2017-18          | 0                                | 19,088.01                        | 19,088.01 |
| 2018-19          | 7,935.72                         | 28,506.54                        | 36,442.26 |
| 2019-20          | 9,088.75                         | 30,656.81                        | 39,745.56 |

- (c) The details of the schemes/programmes identified so far for utilization of education cess are as under:
1.  Schemes implemented by Department of Higher Education:-
- (i)  Rashtriya Uchhatar Shiksha Abhiyan (RUSA)
- (ii)  Interest Subsidy and contribution for Guarantee Funds
- (iii)  Scholarship for College and University students
- (iv)  Pandit  Madan  Mohan  Malviya  National  Mission  on  Teachers and  Teaching
- (v) Support to Indian Institutes of Technology
- (vi)   University Grants Commission (UGC)

(vii) All India Council for Technical Education (AICTE) (viii)Grants to Central Universities (CUs), and (ix) Support to National Institutes of Technology.

2.  Schemes implemented by Department of School Education:-
2. (i)   Mid Day Meal Scheme
3. (ii)   Samagra Shiksha
4. (iii)   Scholarships, and
5. (iv)   Incentives

(d) and (e) The work related to levy of direct taxes and cess on direct taxes is part of continuous process of study of various factors of economy undertaken in  course  of  legislative  and  budgetary  exercise.  Proposal  regarding  levy  of education cess was part of Finance (No.2) Bill, 2004 which was enacted as Finance (No.2) Act, 2004 after debate and discussion in the Parliament. The budget  exercise  is  carried  year  after  year  and  proposals  of  allocation  of education  cess  for  expenditure  on  education  and  health  are  put  before  the Parliament for effective utilization of amount collected from the cess.

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