The Confederation of Indian Industry (CII) on Tuesday suggested several measures to address the issues crucial for speeding up industrial and economic development of Rajasthan and steps to radically improve the desert State’s fiscal health, besides recommending a roadmap for comprehensive and inclusive development to benefit all sections of society.

In its pre-Budget memorandum for 2010-11 submitted to the State Government, the CII made tax recommendations aimed at integrated development and drew Chief Minister Ashok Gehlot’s attention to fast approvals and green channel for investments in solar, wind and biomass energy in addition to the creation of the world-class industrial infrastructure.

CII State Council chairman Kishore Khaitan said here that the memorandum laid emphasis on creating brand image of Rajasthan, improving connectivity with different parts of the country to promote tourism, single window clearance for all industrial queries, skill development and adoption of new industrial policy to attract investments.

The CII suggested that the value added tax (VAT) rates be kept moderate in comparison with the neighbouring States and a “harmonious VAT regime” be evolved, as is the case with various Central taxes. “Since 80 per cent of the revenue comes from select items such as petrol and diesel and 20 per cent from the rest of the products, we have advised keeping the VAT rates low at about four per cent,” said Mr. Khaitan.

The maximum rate of VAT should be lowered to 12.5 per cent in favour of trade and industry to enable them to compete with their counterparts in other States, while the sales of fruits and vegetables should be exempted from VAT, stated the memorandum.

Mr. Khaitan said the entrepreneurs in the State had been feeling the need for a new industrial policy helpful in the changed scenario and acting as an effective instrument for industrial development. Besides, the tourism outlay in the State Budget should be enhanced and the spending pattern redefined in accordance with the external environment.

The CII called for abolition of the entry tax on goods as recommended by the white paper published by the Empowered Committee of State Finance Ministers on Value Added Tax.

Mr. Khaitan affirmed that the State Government should aggressively promote common effluent treatment plants by allotting land, loans and grants through a fast track single window. Besides, it was high time to promote unconventional power generation by introducing new technologies in solar and wind energy and bio-fuel.

“Investments worth Rs. 50,000 crore to Rs. 1 lakh crore may come in these sectors during the next four to five years,” said Mr. Khaitan, adding that recycling of water, rainwater harvesting and waste water treatment should be made compulsory with effective monitoring and penal provisions.

CII Panel on Economic Affairs convenor Rajneesh Singhvi said the Delhi-Mumbai Industrial Corridor should be a major thrust area for the State Government, which should make efforts for creating state-of-the-art industrial infrastructure to attract investments and promote growth for reaping the corridor’s dividends.

Keywords: RajasthanCIIVAT