We gained from VAT, will roll out GST as well: Siddaramaiah
July, 23rd 2013
The new government in Karnataka will remove all impediments to do business in the State and will strengthen the existing single-window system,” said Chief Minister Siddaramaiah.
Addressing FICCI’s National Executive Committee Meeting (NECM), Siddaramaiah said, “In the changed system, the departments will be required to provide all clearances in a timely manner so that projects can be implemented expeditiously.”
The Commerce and Industries Department has already implemented the e-Udyami project, an online system for project approval and close monitoring of implementation.
The Industrial Policy in force needs some modifications to further catalyse the manufacturing sector. He said, “We welcome FICCI to be associated in drawing the New Industrial Policy, due in January, 2014.”
“My focus area has been to ensure welfare of the poor which will be taken care of by providing good drinking water, quality roads, proper infrastructure, quality education and good law and order,” said Siddaramaiah.
Talking on Goods and Services Tax (GST) roll out, chief minister said “We gained from Value Added Tax (VAT), will roll out GST as well. The introduction of VAT has reformed the state’s commodity taxation to a large extent. The introduction of GST is the next big step which we are planning to take.”
He said, “We have extended our consent for bringing FDI in retail. This will be implemented in line with the norms prescribed by the Government of India. It will give a major fillip to economic growth and employment creation”.
To give growth the required buoyancy, infrastructure requires immediate attention. “We will ensure that power projects both in conventional and non-conventional sectors, will be implemented faster. We are in the process of getting coal block allocation. We expect Karnataka to be a power surplus state by 2017. We will make all efforts to supply quality power to industries,” chief minister said.
To provide adequate infrastructure, especially in Bangalore, projects close to Rs 6,000 crore are proposed to be taken up to improve the quality of infrastructure in the city. Nearly Rs 32,000 crore will be invested in Metro and Sub-urban railway system in the coming years.
“At the same time, we will also develop quality infrastructure, to make tier II towns attractive investment destinations,” he explained.
The State government had proposed establishment of a National Investment Manufacturing Zone (NIMZ), as envisaged in the National Manufacturing Policy in Tumkur District. The Central Government has granted approval to establish a NIMZ spread over 12,000 acres of land near Tumkur. “We are also trying to get approval for two more NIMZs, one each in Gulbarga and Kolar,” he added.
While addressing the meet Naina Lal Kidwai, President of FICCI, said, “The growth of the State Gross Domestic Product and that of manufacturing sector in the state is very low. However, under the similar external variables, some states have done exceptionally well and achieved a growth rate of over 9 per cent in the last five years. Unfortunately, Karnataka did not fare well on this count.”
The Compounded Annual GOP Growth (CAGR) of Karnataka has been 5.86 per cent between the period 2007-08 and 2012-13 compared to the national average of 7.16 per cent. Similarly, manufacturing sector grew at a CAGR of 4.09 per cent in the State, much below the national average of 5.74 per cent.
For Indian economy to grow at a reasonably good pace, states like Karnataka will have to lead the way.
She urged the chief minister to consider reduction in VAT. The tax has been kept at 14.5 per cent for the consumer goods and 5.5 per cent for industrial inputs. The rates were raised last year by the government from 14 per cent and 5 per cent respectively to raise the additional resources needed for the waiver of crop loan to farmers, and for drought relief measures and industry was expecting a reduction (in the State’s Budget) this time.”