Macro Economy

Coal cess mop-up may beat total of last 5 years

Debabrata Das New Delhi | Updated on January 20, 2018

coal cess

To fetch ₹30,000 cr in FY17; levy hiked 3 times by Modi govt

The carbon tax — a ₹400/tonne cess on coal use — rechristened the ‘Clean Environment Cess’, has seen an eight-fold increase since the NDA government took charge in 2014. The Modi government has hiked the cess thrice during its 22 months in power.



The mop-up in 2016-17 alone could be more than the combined collection of the previous five years.



While Budget 2016-17 estimates collections from the Clean Environment Cess for 2016-17 at ₹26,148.2 crore, Coal Ministry officials say the figure could end up being as high as ₹33,000 crore. “If you consider Coal India’s production at 600 million tonnes, Singareni Collieries at 50 million tonnes and another 150 million tonnes of imports, the total consumption will be around 800 million tonnes. Add to that some lignite consumption in the country, and collections could easily be ₹33,000 crore,” a senior Ministry official said.



“In fact, if the levy stays at this level it is not inconceivable that from 2017-18, the annual collection could be ₹40,000 crore,” he added.



The Clean Energy Cess — as it was termed earlier — was introduced in 2011. Between 2011-12 and 2015-16, the total collections stood at ₹27,120 crore. Of this, increases in the cess by the NDA Government alone have yielded ₹18,016.46 crore, or about 66 per cent of the totalfor that period.



More hikes



Power Minister Piyush Goyal has not ruled out future increases in the cess. “We are conscious of the environment. I want to make sure that we provide cheap power to people. Solar power tariffs are fixed for 25 years and the sun is never going to charge a tax for beaming down on India,” he said on Wednesday.



Part of the collections from the cess is transferred to the National Clean Energy Fund, which provides funding support to clean energy projects and projects identified under the National Action Plan on Climate Change.



Between 2011-12 and 2015-16, an estimated ₹13,616 crore was transferred to the National Clean Energy Fund, according to data furnished in the Rajya Sabha. Budgetary allocations from the National Clean Energy Fund for various projects have also seen a 57 per cent increase for 2016-17, at ₹7,250 crore.



In fact, allocations from the fund for clean energy and environment-friendly projects have grown four-fold since Finance Minister Arun Jaitley’s first Budget in 2014-15.



Published on March 03, 2016

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