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Pradhan Mantri Swasthya Suraksha Nidhi

  • 11 Mar 2021
  • 5 min read

Why in News

The Union Cabinet has approved the Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN) as a single non-lapsable reserve fund for Health from the proceeds of Health and Education Cess.

Key Points

  • Salient Features of the Pradhan Mantri Swasthya Suraksha Nidhi (PMSSN):
    • It is a non-lapsable reserve fund for Health in the Public Account.
    • Proceeds of share of health in the Health and Education Cess will be credited into PMSSN.
    • Accruals into the PMSSN will be utilized for the flagship schemes of the Ministry of Health & Family Welfare namely,
    • Administration and maintenance of the PMSSN is entrusted to the Ministry of Health & Family Welfare (MoHFW).
      • In any financial year, the expenditure on such schemes of the MoHFW would be initially incurred from the PMSSN and thereafter, from Gross Budgetary Support (GBS).
  • Benefits of PMSSN:
    • Enhanced access to universal & affordable health care through availability of earmarked resources, while ensuring that the amount does not lapse at the end of financial year.
  • Significance of Spending on Healthcare:
    • Improved Developmental Outcomes: From an economic standpoint, better health improves productivity, and reduces losses due to premature death, prolonged disability and early retirement.
    • Enhance Opportunities: One extra year of population life expectancy raises GDP per capita by 4%, investment in health creates millions of jobs, largely for women, through a much needed expansion of the health workforce.
  • Health and Education Cess:
    • In the Budget speech 2018, the Finance Minister while announcing Ayushman Bharat Scheme, also announced replacement of existing 3% Education Cess by 4% Health and Education Cess.
      • It is collected with the aim of addressing the educational and healthcare needs of rural families in India.


  • Different from the usual taxes and duties like excise and personal income tax, a Cess is imposed as an additional tax besides the existing tax (tax on tax) with a purpose of raising funds for a specific task.
  • The Union government is empowered to raise revenue through a gamut of levies, including taxes (both direct and indirect), surcharges, fees and cess.
    • A cess, generally paid by everyday public, is added to their basic tax liability paid as part of total tax paid.
    • Article 270 of the Constitution allows cess to be excluded from the purview of the divisible pool of taxes that the Union government must share with the States.
  • Cess collected for a particular purpose cannot be used for or diverted to other purposes. A particular cess continues to be levied till the time the government collects enough funds for the purpose that it was introduced for.
    • For example, the Swachh Bharat cess (abolished in 2017) was levied by the government for cleanliness activities.
  • Difference between Surcharge and Cess:
    • Surcharge is an additional charge or tax levied on existing tax. The main surcharges are on personal income tax (on high income slabs and on super rich) and on corporate income tax.
    • Despite both are not shareable with state governments, surcharge can be kept with the Consolidated Fund of India (CFI) and spent like any other taxes, the cess should be kept as a separate fund after allocating to CFI and can be spent only for a specific purpose.
    • A surcharge is discussed under Article 270 and 271 of the Indian Constitution.
    • Unlike a cess, which is meant to raise revenue for a temporary need, surcharge is usually permanent in nature.

Source: TH

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