First two quarters of 2024-25 yield approximately ₹550 crore from the social security cesses

The first two quarters of 2024-25 yielded ₹549.71 crore for the social security seed fund from the cesses on fuel and liquor, show government data.

In the six months from April to September, the cess on Indian Made Foreign Liquor (IMFL) yielded ₹ 107.67 crore and that on petrol and diesel, ₹442.04 crore, show provisional data with the Finance Department. The cesses are insufficient to pay even a month’s social security pensions in full, and allocations from the budget provision remain the mainstay for the social security and welfare fund pensions which, according to the government, benefits approximately 62 lakh people.

Every month, Kerala has to shell out ₹900 crore for distributing the social security and welfare fund board pensions at ₹1,600 per beneficiary.

Till September this fiscal, the State government had released ₹6,500 crore to the Kerala Social Security Pension Ltd (KSSPL) from the budget provision for paying the pensions.

According to a recent statement by Finance Minister K.N. Balagopal’s office, the present LDF government had so far authorised the release of approximately ₹33,000 crore for distributing the pensions. Of the total beneficiaries, 5.88 lakh are eligible for Central government assistance of up to ₹300 per person in their monthly ₹1,600 payment. According to the State Finance Department, the arrears on the Central share has mounted to about ₹400 crore from July 2023 to October 2024.

In the 12 months of 2023-24, the IMFL cess had generated ₹217.13 crore and that of petrol and diesel, ₹954.32 crore for the seed fund.

The cesses were first announced in the 2023-24 State Budget to finance the Social Security Seed Fund, as the annual financial commitment was getting heavier. As per this decision, a cess of ₹20 is levied on every bottle of IMFL priced between ₹500 and ₹999 and ₹40 on those priced ₹1,000 and above. This arrangement has remained intact in the 2024-25 fiscal as well.

The cesses were announced in the 2023-24 budget as a means to “supplementing the financial resources” to continue supporting vulnerable sections. The government had expected an annual additional revenue of ₹400 crore from the levy on IMFL. The per-litre ₹2 cess on petrol and diesel was expected to yield ₹750 crore for the seed fund annually.

Published - November 06, 2024 07:15 pm IST