Chief Minister Siddaramaiah on Sunday said that the industry’s demand to restore value added tax (VAT) to 14 per cent from the existing 14.5 per cent would be considered in the next budget.
Interacting with members of the Federation of Karnataka Chambers of Commerce and Industry (FKCCI) here, Mr. Siddaramaiah said, “Wait for some more time.” Based on the previous fiscal’s tax growth of 20 per cent, he too had fixed the target of 20 per cent growth to collect Rs. 37,740 crore. The government is confident of achieving the growth with the cooperation of the industry, albeit with a little difficulty. Till October-end, about Rs. 20,000 crore have been collected, he said.
The tax rate was increased by 0.5 per cent from the 5 per cent and the 14 per cent slabs during the Jagadish Shettar government to net in more revenue to fund farm loan waiver. Though Mr. Shettar had announced that the increase would be effective only for a year, from August 2012 to July 2013, the rates have been continued.
Mr. Siddaramaiah said that though the State is in the forefront in tax collection, it is yet to collect tax dues from the Union government. When he sought balance amount of Central Sales Tax (CST) compensation (Rs. 960 crore) for 2010-11, Union Finance Minister P. Chidambaram had, on Saturday, expressed the inability to accede to the demand immediately.
The Chief Minister rubbished allegations that he was only pro-farmer and pro-rural and said that he was also pro-industry and pro-urban areas. “I want to achieve equitable growth through the participation of all. Infrastructure in rural areas too needs to be developed for decongesting urban areas, especially Bangalore,” he said.
As his government had to clear several dues incurred by the previous government, including Rs. 2,500 crore towards farm loan waiver and bills towards infrastructure projects, he would not be in a position to provide more funds for infrastructure this fiscal. However, adequate funding would be made next year, he assured.
Mr. Siddaramaiah promised that another 4,000 MW power would be added to the State grid in the next three years thereby attracting investment both from within and outside.