The Union Cabinet
chaired by the Prime Minister Shri Narendra Modi has accorded its approval
today for creation of a non-lapsable pool in the Public Account for secondary
and higher, education known as "Madhyamik and Uchchtar Shiksha Kosh"
(MUSK) into which all proceeds of "Secondary and Higher Education
Cess" will be credited.
The funds arising from the MUSK
would be utilized for schemes in the education sector which would be available
for the benefit of students of secondary and higher education, all over the
country.
In connection with the above fund,
the Union Cabinet also accorded its approval to the following:
(i)
Administration and maintenance of the above pool by Ministry of Human
Resource Development.
(ii)
Accruals from the Cess would be utilized in the ongoing schemes of
Secondary and Higher Education. However, the Ministry of Human Resources
Development can allocate funds for any future programme/scheme of secondary and
higher education, based on the requirement, as per prescribed procedure,
(iii)
In any financial year, the expenditure on ongoing schemes of the Department
of School Education & Literacy and Department of Higher Education would be
initially incurred from the gross budgetary support (GBS) and the expenditure
would be financed from the MUSK only after the GBS is exhausted.
(iv)
The MUSK would be maintained as a Reserve Fund in the non-interest bearing
section of the Public Accounts of India.
The major benefit will be enhancing
access to secondary and higher education through availability of adequate
resources, while ensuring that the amount does not lapse at the end of
financial year.
Features:
1. Accruals
into the proposed non-lapsable fund will be made available for expansion of
secondary education and higher education.
2. For
Secondary Education: Presently, the
Ministry of Human Resources Development envisages that the accruals from the
Cess would be utilized in the secondary education for:
ongoing
Rashtriya Madhyamik Shlksha Abhiyan Scheme and other approved programmes
including:
National
Means-Cum-Merit Scholarship Scheme and
National
Scheme for Incentives to Girls for Secondary Education.
3. For
Higher Education: the accruals would be
utilized for:
ongoing
Schemes of Interest Subsidy and contribution for guarantee funds, Scholarship
for College & University Students;
Rashtriya
Uchchtar Shiksha Abhiyaan;
Scholarship
(from Block Grant to the institutions) and National Mission on Teachers and
Training.
However,
the Ministry of Human Resources Development can allocate funds for any
programme/scheme of secondary and higher education, based on the requirement
& prescribed procedure.
The purpose of levying
cess for secondary and higher education is to provide adequate resources for
secondary and higher education.
The fund would be
operationalised as per the present arrangements under Prarambhik Shiksha Kosh
(PSK) wherein the proceeds of cess are used for Sarv Shiksha Abhiyan (SSA) and
Mid-Day Meal (MDM) Schemes of the Department of School Education &
Literacy.
Background:
(i)
During the 10th Plan, an education cess of 2% on all central taxes was
imposed w.e.f. 1.4.2004 to make available additional resources for
basic education/elementary education to augment the existing budgetary
resources. A need was felt to give a similar fillip to the effort of the
Central Government in universalizing access to secondary education and
expanding the reach of the higher education sector. Therefore, the Finance
Minister, in his budget speech of 2007 proposed an additional cess of 1% on
central taxes for secondary and higher education.
(ii)
A cess @ 1% on central taxes, called the "Secondary and Higher Education
Cess" was levied through Finance Act, 2007 to "fulfil the commitment
of the Government to provide and finance secondary and higher education"
(Section 136 of the Act).
(iii)
In July, 2010, a draft cabinet note was circulated by the HRD Ministry wherein
it was proposed to create a non-lapsable fund in the Public Account
called "Madhyamik and Uchchatar Shiksha Kosh" (MUSK) as a
receptacle for the proceeds of the Secondary and Higher Education Cess. The
views of concerned Ministries viz the then Planning Commission, Ministry of
North Eastern Region, and Department of Economic Affairs, Ministry of
Finance were sought in this regard. The Department of Economic Affairs did not
agree to the proposal on the grounds that the Budget allocations for the
schemes of Secondary Education and Higher Education have been far more than the
amount of 1% cess collected. Therefore, the amount of the cess collected is
deemed to have been fully allocated for the schemes of Secondary and Higher
Education in the respective financial years. Hence, funds on account of 1% cess
for the past period are not available now for allocation.
(iv)
Subsequently, the HRD Ministry sought the approval of the Department of
Economic Affairs for revisiting the issue of creation of "Madhyamik and
Uchchatar Shiksha Kosh" (MUSK) on 11th February, 2016. Department of
Economic Affairs on 20th June, 2016 approved that this Ministry may move a
draft Cabinet Note to seek the approval of the Cabinet for creation of. MUSK.
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AKT/VBA/SH