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Exempt VAT on diesel for captive power; AP Govt urged
September, 12th 2012

The Andhra Pradesh Government should immediately issue a GO exempting VAT on diesel used for captive power generation by industrial units, as promised by the Chief Minister, according to the representatives of Federation of Andhra Pradesh Industries.

There is no justification for any further delay in view of the grave power crisis gripping the State and crippling the units, they said.

The plea was voiced by industrialists at a regional convention of industries organised here on Tuesday by the Federation of Andhra Pradesh Industries (FAPI). Andhra Minister Minister for Ports G. Srinivasa Rao has promised that he would take it to the notice of the Chief Minister.

B.V. Rama Rao, President of the federation, earlier said most of the units in the State were functioning at less than 50 per cent capacity due to the power crisis, and the small and medium units in particular were on the verge of closure.

They were not able to pay salaries to the staff, pay back bank loans and meet other commitments. Therefore, it was the bare minimum the Government could do for the industry, he said.

The Minister said that there is a grave power crisis in the State due to several factors such as insufficient rainfall hitting hydel generation and the non-availability of gas for gas-based power stations. Whatever the reason, I also own responsibility as the Minister for Investments.

He said the State Government would make all efforts to tide over the crisis.

We have signed MoUs for more than Rs 4,00,000 crore additional investment in the State as a whole and Rs 1,00,000 crore in the Visakhapatnam region alone. Therefore, we have to address the problem urgently. But it is only a short-time one and it will not hit investments in the long run. Even now, AP is regarded as a favourable destination for investment, he said.

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