Krishi Kalyan Cess, a 0.5% cess on all taxable services introduced last year to support a drought-hit farm sector, will raise Rs 9,000 crore in 2016-17
New Delhi: Krishi Kalyan Cess, a 0.5% cess on all taxable services introduced last year to support a drought-hit farm sector, will raise Rs 9,000 crore in 2016-17, budget documents presented in the parliament on Wednesday showed.
The central government is spending money from this corpus on crucial schemes like crop insurance and interest subsidy on crop loans. The Centre also expects to collect 20% more through the same cess in 2017-18, adding up to Rs 10,800 crore, which will again be spent on these schemes.
In 2016-17 (according to revised estimates) the cess helped pay 27% (Rs 3596 crore) of the Rs 13,240 crore spent on the Pradhan Mantri Fasal Bima Yojana (PMFBY), the Prime Minister’s flagship crop insurance scheme. As per the budget speech by finance minister Arun Jaitley, PMFBY will cover 40% India’s farmers by 2017-18 and half of them by the following year.
The other major scheme which the cess is helping fund is the interest subsidy on short-term crop loans taken by farmers. According to the revised estimates (RE) for 2016-17, the cess funded Rs 5204 crore (nearly 40%) of the Rs 13,619 crore spent on interest subsidies.
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