Santosh Solanki: Salting the Budget

Congratulations to Santosh Solanki. A cheque for Rs 1,000 is on its way.

Gandhiji's Salt March was one of the most inspiring events in the history of India's freedom movement. The Salt Satyagraha was more than a protest against taxing the poor man's diet, or a disobedience of the salt laws, it was a focal point of the national movement.

Unfortunately, after independence the Government of India, like the British government, treated the salt industry as a source of revenue generation and imposed a tax on salt under a different name, cess, to meet the salt department's administrative expenditure.

Whatever the name, it is a burden on the poor man but it is learnt that the salt department officials are against the abolition of the cess. They are afraid that if the cess is abolished, their department will be closed, as recommended by the Expenditure Reforms Committee. 
 

Collection of cess, miscellaneous receipts and expenditure of salt department
Year	Receipts (A)		Total Expenditure	(B)	A-B
	Cess	Misc
1996-1997	245.22	172.23	417.45	576.74	-159.29
1997-1998	243.24	138.48	381.72	724.36	-342.64
1998-1999	233.13	92.82	325.95	1235.34	-909.39
1999-2000	264.80	629.85	894.65	984.9	-90.25
2000-2001	248.44	74.44	322.88	1046.01	-723.13
2001-2002	268.69	86.75	355.44	918.27	-562.83
2002-2003	297.43	142.36	439.79	1058.27	-618.38
2003-2004	277.63	127.48	405.15	1042.04	-636.89
Figures Rs in lakhs

To protect themselves, they have lobbied the minister for commerce and industry to increase the assignment fee and ground rent manifold. I would like to suggest that on the eve of 75th anniversary celebrations of the Salt Satyagraha, the finance minister abolishes the cess on salt.

Consider the effect, first, on salt manufacturers. Salt manufacturing essentially depends on nature. Almost every year salt farmers face cyclones, floods, earthquakes and so on.

Many farmers lost their salt produce in the recent tsunami. Apart from increasing the ground rent and assignment fee, the government also increased the countervailing duty on iodine in the last Budget.

In addition to government dues, expenditure on labour, electricity and fuel have also increased many times. Many of the salt farmers are small manufacturers, so abolishing the cess would give them considerable relief.

Consider also the effect on public health. Not only do almost a quarter of Indians live below the poverty line, almost every state in India is goitre endemic, owing to a lack of iodised salt. The government launched a scheme called the

National Iodine Deficiency Disorders Control Programme under the supervision of the ministry of health to curb iodine deficiency disorders.

Though India is self sufficient in iodised salt, poor people rarely have access to it because of its high price. If the cess on salt is abolished, the price of iodised salt will drop and more people would be able to buy it.

Significantly, the abolition of the salt cess will also save the government lakhs of rupees because, as the accompanying table shows, the salt department's expenditure far exceeds the actual proceeds from cess collection.