Other States - Madhya Pradesh   

Trade bodies lay stress on completion of infrastructure projects

Staff Correspondent

M .P. Govt. urged to end disparity in VAT rates in comparison with other States

BHOPAL: Organisations representing industry and trade in Madhya Pradesh are unanimous that the upcoming State budget for 2007-08 should address the issue of infrastructure and multiple taxes. The Government has been urged to end the disparity in VAT rates levied in the State in comparison with many other States. The Confederation of Indian Industry has asked the State Finance Minister to lift the numerous State levies that only add up to the cost of production as a result of which the manufacturers and producers of goods here suffer as they do not have the cost advantage compared to other States. In a memorandum submitted to the Government before the presentation of the budget in the Assembly on Monday, the CII has said that there should be speedy implementation of infrastructure projects.

While asking the Government to declare Bhopal and Indore airports as Customs airports, the CII has also urged the State Government to bring down the cost of aviation turbine fuel, which is the highest in Madhya Pradesh. The PHD Chamber of Commerce and Industry in its pre-budget memorandum has emphasised the need for effective use of resources for sustainable long-term development and creation of an industry-friendly environment in the State.

While appreciating the "ongoing endeavour" of the State Government to achieve fiscal stability, PHDCCI has called for enhanced efforts to eliminate revenue deficit so that borrowings are used not for financing revenue expenditure but generating capital assets. It has been suggested that Madhya Pradesh should bring transparency, accountability and stability to fiscal operations.

The Government could also consider it appropriate to adopt a fiscal responsibility and budget management legislation as has been done by the Haryana Government. PHDCCI has said that since the State is deprived of huge revenue on account of pending arrears/dues across various departments including power, sales tax, land and registration, the Government should immediately set up a fast track committee to initiate a dispute redress mechanism. It has been argued that subsidy reforms be directed towards reducing the overall scale of subsidies and directing subsidies for well defined economic objectives.

The VAT rates are 0, 4 per cent, 8 per cent and 12 per cent in general and 20 per cent on a few demerit commodities. Post-VAT the revenue of the Government has increased and in the current year, on account of high economic growth rate, the VAT revenue will be more buoyant. Therefore, it has been suggested that the general rate of VAT should converge at not more than 8 per cent.

The Government has been advised to take corrective measures to end inter-State disparities with regard to VAT and entry tax. A comparative study reveals tax disparities for major industrial products. For instance the rate of VAT on plywood in Delhi is 4 per cent whereas in Madhya Pradesh it is 12.5 per cent. There is also an additional 1 per cent entry tax on this item.

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

Madhya Pradesh annual plan pegged at Rs 12,011 crore
Register cases for deaths caused by Celphos, demands expert
Trade bodies lay stress on completion of infrastructure projects

Copyright © 2007, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu