Himachal Pradesh Imposes 'Orphan and Widow Cess' on Fuel
Himachal Pradesh Cabinet approves cess on fuel to fund welfare schemes.
Photo by The New York Public Library
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Himachal Pradesh: Location of 'Orphan and Widow Cess' Implementation
This map highlights Himachal Pradesh, where the 'Orphan and Widow Cess' on fuel is being implemented. It shows the state's geographic context and its potential impact on fuel prices within the region.
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Cess: Orphan and widow cess on fuel
State: Himachal Pradesh
Purpose: Welfare schemes for orphans and widows
Exam Angles
GS Paper II: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes
GS Paper II: Issues relating to poverty and hunger
GS Paper III: Government Budgeting
Potential question types: Statement-based, analytical questions on fiscal federalism and welfare economics
More Information
Background
The concept of levying specific taxes or cesses for social welfare isn't new. Historically, many societies have earmarked revenue for vulnerable populations. In India, the practice of earmarking funds through cesses gained prominence post-independence, often linked to specific sectors like education or infrastructure.
The legal basis for such levies stems from the power of state legislatures to enact laws on subjects listed in the State List of the Seventh Schedule of the Constitution. The evolution of welfare states globally has seen a rise in targeted taxation to fund social security nets. The Himachal Pradesh initiative reflects a contemporary approach to addressing the needs of specific vulnerable groups, mirroring similar efforts in other states and countries to ensure dedicated funding for social programs.
Latest Developments
In recent years, there's been a growing trend among states to explore innovative financing mechanisms for social welfare schemes, moving beyond traditional budgetary allocations. This includes leveraging public-private partnerships, exploring carbon credits, and implementing targeted cesses. The Himachal Pradesh initiative aligns with this trend.
The future outlook suggests that more states might adopt similar models to ensure sustainable funding for social programs, especially in the face of increasing fiscal pressures and the need for targeted interventions. There's also a growing emphasis on transparency and accountability in the utilization of such funds, with mechanisms like social audits and real-time monitoring being implemented to ensure effective delivery of benefits.
Practice Questions (MCQs)
1. Consider the following statements regarding the 'orphan and widow cess' imposed by Himachal Pradesh: 1. The cess is levied on the final retail price of petrol and diesel. 2. The revenue generated is exclusively earmarked for welfare schemes benefiting orphans and widows within the state. 3. The cess is applicable only to petrol and not to high-speed diesel. 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 because the cess is levied at the point of first sale, not the retail price. Statement 3 is incorrect as the cess applies to both petrol and high-speed diesel. Only statement 2 is correct.
2. Which of the following constitutional provisions empowers a state government in India to levy a cess on fuel for welfare purposes?
- A.Article 246 read with the Union List (List I) of the Seventh Schedule
- B.Article 246 read with the Concurrent List (List III) of the Seventh Schedule
- C.Article 246 read with the State List (List II) of the Seventh Schedule
- D.Article 280 read with the Finance Commission's recommendations
Show Answer
Answer: C
Article 246, along with the State List (List II) of the Seventh Schedule, empowers state governments to make laws on subjects enumerated in that list, including taxes applicable within the state.
3. Assertion (A): Himachal Pradesh has imposed an 'orphan and widow cess' on fuel to fund welfare schemes. Reason (R): States have the constitutional authority to levy taxes and cesses on subjects within the State List to raise revenue for specific social welfare objectives. In the context of the above, which of the following is correct?
- A.Both A and R are true, and R is the correct explanation of A
- B.Both A and R are true, but R is NOT the correct explanation of A
- C.A is true, but R is false
- D.A is false, but R is true
Show Answer
Answer: A
Both the assertion and the reason are true, and the reason correctly explains why Himachal Pradesh can impose such a cess.
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