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User charges of passport, licence, examinations, and other services set to get costlier

You may need to pay more for passport, licences, registration, examinations and a host of other services provided by the government as the finance ministry has asked departments and ministries to raise user charges to recover costs of services provided.

The finance ministry, which has started budget discussions, wants ministries and departments to meet expenditure on existing projects by raising user charges.

“Autonomous organisations should move towards self-sufficiency…. How long can the government go on subsidising a service?” a government official privy to the deliberations told ET.

For example, Union Public Service Commission still charges Rs 100 for civil service exam though costs for conducting it has gone up substantially over the years. Some of the Railway services also are heavily subsidised.

Charges for most other services have remained stagnant or witnessed minimal increases. Passport fee were last revised in September 2012 when it was raised from Rs 1,000 to Rs 1,500. In most cases, fees are not sufficient to cover costs, yielding an implicit subsidy to the consumers. There have been such directions in the past, but not much changed at the ground level.

But this year, the exercise is more focused with the finance ministry separately taking it up with all departments and ministries after the Expenditure Management Commission (EMC), led by ex-RBI governor Bimal Jalan, in its report pressed on the need for the recovering cost of services rendered by departments.

“The EMC had said that cost of service should be recovered to make it self-sustaining and subsidy element be gradually brought down,” the government official said.

 Recommendations of the commission have also been circulated to ministries for action in their respective areas as part of expenditure rationalisation. A number of steps have already been undertaken in line with the commission’s recommendations including rationalisation of kerosene and diesel subsidy.

Expenditure rationalisation has become more imperative as the fiscal deficit in the first six months touched 83.9% of the budget estimates for the whole year.

 Keen to give a boost to the economy, the government is not inclined to cut down capital expenditure going forward and is likely to go in for rationalisation based on utilisation.

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