Chief minister N Kiran Kumar Reddy and labour minister Danam Nagender are at loggerheads over the issue of slashing VAT on textiles. Till recently a supporter of the chief minister, Danam is now seething with anger at Kiran Kumar and wants him to explain to the public as to how he suddenly changed his stand on VAT on textiles after having firmly opposed it till now.

Danam has reportedly dashed off a letter demanding that the decision to drastically cut down VAT on textiles be kept in abeyance till the chief minister gives an explanation to the cabinet and the public over the latter's change of heart. The letter, addressed to Kiran Kumar two days ago, reminded the chief minister of the cabinet meeting held a month ago wherein Kiran had vehemently opposed the demand for withdrawal of VAT on textiles on the grounds that the state would lose funds up to Rs 1,000 crore per annum.

According to the letter, in the cabinet meeting last month, the chief minister had fiercely opposed Danam's suggestion that VAT on textiles be immediately lifted as it was greatly harming the business interests of medium-range textile traders. Since Kiran Kumar, supported by finance minister Anam Ramanarayan Reddy, had turned down the labour minister's suggestion by stating that such a decision would not only affect the revenue of the state, but also ensure a loss of funds' flow to the state from the Centre, how could the chief minister change the stand all of a sudden without any justification, Danam is said to have asked the chief minister in the letter.

Till a proper justification is given to the cabinet and the public, let the decision on VAT given to textile traders be kept in abeyance, Danam said in his letter. And until a decision is forthcoming on his demand, the labour minister has threatened to stay away from government functions including Prajapatham in Hyderabad.