Growth of Cess and Surcharges in India: With Special Reference to Education Cess of Union Government and Its Utilisation

Abstract

This article presents the analysis of trends and contribution in education budget of education cess levied by the union government and discusses its implications for state governments. It is generally contested that vertical imbalance will continue as the union government is making use of certain constitutional provisions such as levying cesses and surcharges and mobilising resources at its disposal, which does not have constitutional mandatory/obligation sharing with the states. Evidence presented in the article indicates such a trend in India. Education cess is one such instrument that the union government is leveraging. While the union government expenditure on education is one-fourth of the total public expenditure on education (states–centre) in India, half of the union government’s Ministry of Education expenditure is raised through education cess.