According to the Union Budget 2021 - 22, Finance Minister proposed a new levy Agriculture Infrastructure and Development Cess. This cess will be levied on how many products?

Question

UnlockIAS · Accepted Answer

Correct — D, 29 products. In the Union Budget 2021-22 (presented 1 February 2021), Finance Minister Nirmala Sitharaman introduced a new cess, the Agriculture Infrastructure and Development Cess (AIDC), levied on 29 items/products. Prominent items included gold and silver, imported apples, imported alcoholic beverages (other than beer), imported pulses, crude palm/soyabean/sunflower oils, imported urea and other fertilisers, coal/lignite/peat, cotton, and petrol and diesel. Its purpose is to raise dedicated revenue to fund agricultural infrastructure and development. Importantly, the cess was designed to be largely price-neutral for consumers: on most of these items the basic customs duty (or excise, in the case of petrol/diesel) was cut by roughly the same amount, so retail prices were not meant to rise. The official key marks the number of products at 29 → option (d).

Why the other options are wrong — (a) Wrong — this under-counts; the AIDC in Budget 2021-22 applied to 29 products, not 12.  (b) Wrong — the cess covered 29 items, not 20.  (c) Wrong — a close distractor, but the verified figure is 29 products, not 25.

Concept: A 'cess' is a tax levied for a specific, earmarked purpose — its proceeds are kept for that purpose rather than merged into the general revenue pool. The Agriculture Infrastructure and Development Cess (AIDC), announced in the Union Budget 2021-22, earmarks funds for building agricultural infrastructure (warehousing, cold chains, mandis, farm-gate assets). It was imposed on 29 specified goods — a mix of imported items (customs AIDC) and petrol/diesel (excise AIDC). To avoid burdening consumers, the government simultaneously reduced the basic customs duty or excise on most of these items, so the overall tax incidence stayed broadly unchanged.

State PCS 2021 Q98 — Economy PYQ with Answer

State PCS 2021 Q98 — Economy PYQ with Answer