The Hindu : Other States / Rajasthan News : CII seeks early introduction of VAT

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Saturday, Feb 19, 2005

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CII seeks early introduction of VAT

By Our Special Correspondent

JAIPUR, FEB. 18. A pre-Budget memorandum from the Confederation of Indian Industry (CII) to the Rajasthan Government has recommended early introduction of value added tax (VAT). For effective implementation of VAT, the State Government should insist upon the Centre to withdraw the Central Sales Tax (CST), which resulted in multiple taxation, completely, the CII said.

A delegation of CII, led by Vikram Golcha, chairman, Rajasthan State Council, which met the Minister of State for Finance, Virendra Meena, with a 15 point "agenda for growth'' cautioned the Government against the increasing debt burden. "If the current trends continue, debt servicing costs would claim an even greater share of revenue receipts, leaving that much less for development expenditure,'' it was pointed out.

The thrust areas in the recommendations included manufacturing and service sectors. "The State needs to experience significant growth in these sectors coupled with rapid increase in agricultural productivity,'' it said. The memorandum outlined its guidelines for other priority areas like tourism, mining, handicrafts, textiles, gem and jewelry.

There was a need to re-prioritize expenditure so that greater money is allocated towards creation of capital assets that enhanced social and economic infrastructure.

The State should go for urban reforms which included re-drafting laws on municipal ceiling, rent control, land ceiling acts and also should consider reducing stamp duty to 4 per cent. To facilitate industrial growth, inspector raj should be eliminated and a single window system, which would ensure future licences as well, should be established.

The CII charter suggested a reduction of royalty for zinc and lead metal to 2 per cent to be in line with the international scene. The present royalty on marble blocs which was Rs.145 per metric tonne could be brought down to a "reasonable'' rate of Rs.100 per MT, it said.

"The royalty on minerals should be structured to facilitate value addition at the mining site. The current system is such that it actually levies a greater burden of loyalties if value is added in the mining lease area,'' the memorandum observed.

CII has asked the Government to consider the potential of vast plains, desert and barren lands in Rajasthan for promotion of eco-tourism. Programmes supported by adventure tourism should be drafted. There was also a need to adopt single window clearance system to facilitate shooting of films.

The memorandum suggested a budgetary allocation of Rs.100 crores for tourism as it was the maximum employment and revenue generator in the State.

The CII delegation expressed concern over the continuing high level of transmission and distribution losses in Rajasthan. Against a national average of 25 per cent, Rajasthan had a high 41 per cent T&D losses. Even a reduction of 1 per cent of T&D losses meant a saving of Rs.70 crores, they pointed out.

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