The Hindu : VAT losses: 'Centre will compensate States'

Online edition of India's National Newspaper
Monday, Dec 23, 2002

Southern States

Southern States - Kerala

VAT losses: 'Centre will compensate States'

By Our Special Correspondent

THIRUVANANTHAPURAM DEC. 22. The Central Government has agreed to compensate any loss suffered by the States on account of the implementation of the Value Added Tax (VAT) system next year, said the Kerala Chief Minister, A.K. Antony, here on Sunday.

Talking to presspersons, on his return to the capital after attending the meeting of the National Development Council in Delhi, he said that 100 per cent of the losses would be offset during the first year. The States had demanded offsetting of the losses for three years. The percentage of compensation for the second and third year, however, would be decided only later.

Mr. Antony said that he did not know the criteria to be adopted by the Centre to calculate the losses. The uncertainty about implementation of the VAT system was over. It would be implemented positively from April 1, 2003.

The Centre, he said, had agreed to consider improving the loan grant ratio of Central assistance from 70:30 to 50:50. All States had demanded this. Measures for reducing the debt burden of the States would also be considered.

Asked about the comment of the SNDP Yogam leader, Vellappally Natesan, that the UDF was trying to divide the Ezhavas, the Chief Minister said that he did not wish to enter into any controversies. He did not have time to enter into verbal duels with anyone. He wanted to avoid conflicts and focus on development of the State. The State's backwardness should be removed. Many entrepreneurs were willing to invest in the State. The State should not miss an opportunity owing to obstinacy. Methods of agitations practiced against Sir C.P. Ramaswamy Iyer and the British should be changed.

The Chief Minister, who had submitted memoranda to Union Ministers on various needs of the State, said that he had got positive assurance on several projects. The proposed Vallarpadam international container shipment terminal would be built. This would help the industrial development of the State.

The Railway Minister, he said, had promised to consider the State's demands for railway development in the State. Besides, the Centre will provide assistance for the Pampa Action Plan. Help has been promised in solving the problems in the power sector also.

The State's demand for establishing an Ayurveda park has been accepted in principle. The operation of the price stabilisation fund for tea and coffee plantations will be speeded up.

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