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Disability and the Union Budget

Disability has never been seen as an economic issue in India. Therefore, the Union / State Budget had no relevance for the disability sector all these years. As a consequence, some bizarre taxation policies have existed in our country, adversely affecting the progress of disabled people, with no one actually realising it.

National Centre for Promotion of Employment for Disabled People (NCPEDP) undertook a study on the existing taxation policies and its impact on disabled people. Disabled Rights Group (DRG), which is an umbrella group comprising of disability organisations and activists as its members, launched a campaign in February 2002, to get disability issues addressed in the Union Budget.

Disability and Taxation: The Rationale

Disabled people incur more expenditure than others, for the simple reason that most of the public amenities are not accessible to them. They have to incur extra expenditure in private transport; for making modifications to their houses; for additional expenses in gaining education, physical therapy, medical expenses, etc. It is therefore only logical that the Government should not add to the burden, by taxing the already reduced ‘real’ income of persons with disabilities and their families.

Excise duty on disabled-friendly cars brought down to 8 per cent

In the Union Budget 2003, the Excise Duty on all cars was reduced from 32% to 24% - net decrease of 8%. We found out that the Excise Duty on disabled friendly cars remained at 16%! Another 1% calamity tax was added to all cars in the Budget. This was applied to the accessible cars meant for disabled people also! Thus effectively, the net Excise Duty on cars had gone down from 32% to 25%, whereas on the accessible cars for disabled people it has gone up from 16% to 17% - a net increase of 1%!

When this was brought to our knowledge, we immediately wrote to Shri Jaswant Singh, Finance Minister with the following two requests:

1. To issue a directive to exempt disabled friendly cars from the 1% calamity tax.
2. The reduction of 8% Excise Duty for average cars used by non-disabled people should also be given to disabled consumers. Therefore the Excise Duty on disabled-friendly cars should either be totally exempted or at least brought down to only 8%!

The matter was also brought to the notice of the Deputy Prime Minister, Leader of the Opposition, and other MPs. The office of the Leader of the Opposition immediately wrote to the Finance Ministry on the issue.

As a result, the Finance Ministry issued Notifications on 17th June, 2003 to modify the earlier announcement – No. 52/2003 – Central Excise stated that Excise Duty on motor cars for disabled people is reduced from 16% to 8% No. 53/2003 – Central Excise stated that the disabled-friendly cars are further exempted from the National Calamity tax of 1%.