Deputy chief minister Hemant Soren, in charge of finance portfolio, announced in the assembly on Monday that VAT would not be imposed on food grains to bring relief to common people.

Answering to issues raised by the opposition during the debate over budget proposal, Soren said food grains would continue to be kept out of  VAT for the coming financial year 2011-12. The decision was taken keeping in view the prevailing drought condition in the state. He also expressed his willingness to exempt bedsheets, blankets and towel from the purview of VAT.

This was one of the demands that local traders, cloth merchants and the Federation of Jharkhand Chamber of Commerce and Industries have been raising since the government introduced the VAT on such items. However, despite the demand of motor parts sellers, Soren indicated that VAT would be increased by around 1.5 % in motor parts taking it to 14%. The motor parts sellers were unhappy since the government increased VAT from 4% to 12 .5% and were demanding its revision.