The Lok Sabha passed the 'Health Security Se National Security Cess Bill' through a voice vote after a charged debate.
NEW DELHI — The Lok Sabha passed the 'Health Security Se National Security Cess Bill' through a voice vote after a charged debate that witnessed both support and sharp criticism from members across party lines.
Union Finance Minister Nirmala Sitharaman, piloting the legislation, clarified that the proceeds of the cess would be strictly ring-fenced for two purposes; strengthening India's national security and supporting public health.
She emphasised that the levy was Constitutionally empowered under Article 270, fully accountable to the Parliament, and subject to oversight by the Comptroller and Auditor General of India.
Passing the Bill, Minister Sitharaman said: "That the Bill to augment the resources for meeting expenditure on national security and for public health, and to levy a cess for the said purposes on the machines installed or other processes undertaken by which specified goods are manufactured or produced and for matters connected therewith or incidental thereto, be taken into consideration."
She thanked all the Members of Parliament for participating in the debate and noted that she would restrict her responses due to paucity of time.
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Explaining the framework, the Union Finance Minister said the cess would be confined to demerit goods such as pan masala and levied on production capacity, a long-established method in excise law designed to curb evasion.
She assured the Members of Parliament that any changes in rates or goods would require parliamentary sanction, thereby ensuring transparency and public interest.
"Part of the cess collected will be spent on public health, and the other part on defence. Public health is a state subject, defence is on the Union List. We need to raise resources to match today's needs," she said.
Opposition members, however, raised multiple concerns over the Bill.
Congress MP Shashikanth Senthil described the Bill as a "blank cheque" to the Union government, saying that it lacked clarity on which schemes in health or national security would be funded.
He also criticised the harsh penalties, likening them to provisions in the Prevention of Money Laundering Act.
DMK MP T. Sumathy questioned the "linguistic hybrid" title of the Bill, demanding that the word "se" be replaced with "for" to make the law linguistically neutral.
Trinamool Congress MP Saugata Roy objected to Union Minister Sitharaman speaking in Hindi, saying he could not follow the Minister's remarks, prompting a sharp response from her that translation services were available.
Concerns about federalism also surfaced.
Congress MP Prabha Mallikarjun said that since the cess was outside the divisible pool, states would not receive their share despite being responsible for most public health expenditure.
NCP–SP MP Supriya Sule asked why the levy was introduced as a cess rather than a tax, warning that provisions allowing rates to be doubled without returning to Parliament undermined legislative scrutiny.
Other members, including Umeshbhai Patil and Hanuman Beniwal, highlighted the ineffectiveness of bans on liquor, gutkha, and pan masala, suggesting regulation instead of prohibition.
Union Finance Minister Sitharaman countered that the Union government's intent was to make demerit goods less affordable while raising resources for critical national priorities.
Despite the objections, the Bill was passed, with the Union government insisting that its twin focus on health and national security was both urgent and justified.