Parliament Passes Health & National Security Cess Bill for Key Funding
Parliament passed a Bill to levy a cess for funding health infrastructure, border security, and cyber security, clarifying it's a re-allocation, not a new tax.
Photo by Kunal Saha
Parliament has successfully passed the Health Security and National Security Cess Bill. Finance Minister Nirmala Sitharaman clarified that this isn't a new tax but rather a re-allocation of existing resources, designed to raise funds for critical areas like health infrastructure, border security, and cyber security.
Essentially, the government is earmarking specific revenue streams from certain goods and services to bolster these vital sectors. This move aims to ensure dedicated funding for public health, protecting India's borders, and enhancing digital defenses, which are all crucial for national well-being and stability.
Key Facts
Health Security and National Security Cess Bill passed in Parliament
Cess aims to raise resources for health infrastructure, border security, and cyber security
FM clarified it's a re-allocation of existing resources, not a new tax
UPSC Exam Angles
Constitutional provisions related to taxation (Articles 268-281)
Fiscal federalism and Centre-State financial relations
Budgetary process and financial instruments (cess, surcharge, tax)
National Security framework and institutions
Public health policy and infrastructure funding
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Legislative Process: How a Bill Becomes an Act in Indian Parliament
This flowchart illustrates the typical journey of a bill, including financial bills like the Cess Bill mentioned in the news, through the Indian Parliament to become a law. Understanding this process is crucial for comprehending parliamentary functioning.
- 1.Introduction of Bill (Either House, except Money Bill in Lok Sabha)
- 2.First Reading (Introduction, Gazette Publication)
- 3.Second Reading (Detailed Scrutiny, Committee Stage, Clause-by-Clause Discussion)
- 4.Third Reading (Voting on the Bill as a whole)
- 5.Passage in First House
- 6.Transmission to Second House (Same process: 1st, 2nd, 3rd Reading)
- 7.Passage in Second House
- 8.President's Assent (Can give assent, withhold, or return for reconsideration - except Money Bill)
- 9.Bill Becomes an Act (Published in Gazette of India)
- 10.Joint Sitting (In case of deadlock on Ordinary Bill, not Money Bill)
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Background
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Practice Questions (MCQs)
1. With reference to the 'Health Security and National Security Cess Bill' recently passed by Parliament, consider the following statements: 1. The Bill introduces new taxes on certain goods and services to generate additional revenue. 2. Funds collected through this cess will be exclusively used for health infrastructure, border security, and cyber security. 3. Unlike general taxes, cesses are not part of the divisible pool of taxes shared with state governments. Which of the statements given above is/are correct?
- A.1 and 2 only
- B.2 and 3 only
- C.3 only
- D.1, 2 and 3
Show Answer
Answer: B
Statement 1 is incorrect. The news explicitly states that this isn't a new tax but a re-allocation of existing resources. Statement 2 is correct, as the summary clarifies the dedicated funding areas. Statement 3 is correct. Cesses are levied for specific purposes and are generally not shared with states, thus remaining entirely with the Union government. This is a key distinction from other central taxes.
2. Consider the following statements regarding the constitutional provisions for taxation in India: 1. Article 270 mandates that taxes levied and collected by the Union and distributed between the Union and the States shall include cesses and surcharges. 2. A surcharge levied under Article 271 is exclusively for the Union government and is not shared with the states. 3. The Goods and Services Tax (GST) Council recommends on which goods and services a cess can be levied by the Union government. Which of the statements given above is/are correct?
- A.1 and 2 only
- B.2 only
- C.1 and 3 only
- D.1, 2 and 3
Show Answer
Answer: B
Statement 1 is incorrect. Article 270 specifically excludes cesses and surcharges from the divisible pool of taxes that are shared between the Union and the States. Statement 2 is correct. Article 271 allows Parliament to levy surcharges on certain duties and taxes for the purposes of the Union, and these are not shared with the states. Statement 3 is incorrect. While the GST Council makes recommendations on GST rates and other related matters, the power to levy a cess by the Union government for specific purposes (like the one in the news) generally stems from parliamentary legislation, not directly from the GST Council's recommendations for non-GST cesses. The GST Compensation Cess is a specific type of cess under the GST framework, but general cesses for Union purposes are distinct.
3. In the context of India's national security framework, which of the following statements is/are correct? 1. The National Security Council (NSC) is a statutory body established under an Act of Parliament to advise the Prime Minister on matters of national security. 2. The National Cyber Security Coordinator (NCSC) operates under the Prime Minister's Office and is responsible for coordinating cyber security initiatives. 3. Border guarding forces like the Border Security Force (BSF) and Indo-Tibetan Border Police (ITBP) operate under the administrative control of the Ministry of Defence. Select the correct answer using the code given below:
- A.1 and 2 only
- B.2 only
- C.1 and 3 only
- D.2 and 3 only
Show Answer
Answer: B
Statement 1 is incorrect. The National Security Council (NSC) is an executive body, not a statutory one established under an Act of Parliament. It was established in 1998 by the Atal Bihari Vajpayee government. Statement 2 is correct. The National Cyber Security Coordinator (NCSC) indeed functions under the Prime Minister's Office and plays a crucial role in coordinating cyber security efforts across various agencies. Statement 3 is incorrect. Border guarding forces like BSF and ITBP operate under the administrative control of the Ministry of Home Affairs (MHA), not the Ministry of Defence (MoD). The MoD primarily controls the armed forces (Army, Navy, Air Force).
Source Articles
‘Need to raise resources to buffer defence requirements’: Lok Sabha passes Health Security se National Security Cess Bill | India News - The Indian Express
National security cess not on essential goods, says FM Nirmala Sitharaman | India News - The Indian Express
Health, National Security cess will not be levied on essential commodities; revenues to be shared with states: FM
Centre to bring new levies on tobacco, pan masala as GST compensation cess set to lapse | Business News - The Indian Express
Opposition united at all-party meeting, demands discussions on SIR, national security, federal issues | Political Pulse News - The Indian Express