Understanding the zero-sum game of the new agriculture infra cess

While the FM has ostensibly got her act right on imposing the levy without punishing the consumer, questions about the share of states, the rate structure and the use of funds remain

At the fag end of her 2021-22 Union Budget speech, Finance Minister Nirmala Sitharaman announced that the Central government will levy an Agriculture Infrastructure Development Cess (AIDC) on the import of some items, while taking care to ensure that consumers aren’t burdened by it.

“There is an immediate need to improve agricultural infrastructure so that we produce more, while also conserving and processing agricultural output efficiently. This will ensure enhanced remuneration for our farmers. To earmark resources for this purpose, I propose an Agriculture Infrastructure and Development Cess (AIDC) on a small number of items. However, while applying this cess,