UPPSC 2021 Prelims GS Paper-I · Question 98 of 150

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).

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

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.

This is a Budget current-affairs recall item — the answer is the specific figure (29) from the 2021-22 Budget. Reason from the meaning of a cess (an earmarked tax) and remember AIDC's purpose (agricultural infrastructure). The trap is the cluster of plausible round numbers (12/20/25); the verified count of products is 29.

• Agriculture Infrastructure and Development Cess (AIDC) — introduced in the Union Budget 2021-22 by FM Nirmala Sitharaman.
• Levied on 29 products/items — imported goods (gold, silver, apples, alcohol excl. beer, pulses, edible oils, fertilisers, coal, cotton) plus petrol and diesel.
• Purpose: earmarked revenue to finance agricultural infrastructure and development.
• Designed to be broadly price-neutral for consumers — basic customs duty/excise cut correspondingly on most items.

• Confusing a 'cess' (earmarked, for a specific purpose) with a 'surcharge' (a tax on tax, not earmarked)
• Assuming AIDC raised retail prices — it was largely offset by cuts in basic customs duty/excise on the same items

Budget current affairs are asked as direct factual recall — the cess/scheme name, its purpose, and the number of items or the rate. Fix the headline figure (AIDC = 29 products).

No directly related past PYQ was found.

• practice — not a real PYQ

  A 'cess' levied by the Government of India differs from a 'surcharge' in that:

  • (a)A cess is earmarked for a specific purpose, while a surcharge is not
  • (b)A surcharge is earmarked, while a cess is not
  • (c)Both are earmarked for specific purposes
  • (d)Neither can be levied by the Union Government

  Answer(a) A cess is earmarked for a specific purpose (its proceeds go to that purpose), unlike a surcharge which merges into general revenue.

• practice — not a real PYQ

  The Agriculture Infrastructure and Development Cess (AIDC), introduced in the Union Budget 2021-22, is meant primarily to fund:

  • (a)Farm loan waivers
  • (b)Agricultural infrastructure and development
  • (c)Crop insurance premiums
  • (d)Minimum Support Price payments

  Answer(b) Agricultural infrastructure and development — the earmarked purpose for which the AIDC is collected.