The Hindu Business Line : Kerala ready for VAT regime, says Minister

THE State Government has taken all necessary steps to introduce the value-added tax (VAT) system from April 1, the Finance Minister, Mr Vakkom Purushothaman, said on Monday.

However, if the majority of other States decided against its implementation, Kerala would also postpone it, the Minister told the State Assembly.

He said the VAT system would be beneficial to traders. The Government would appoint a high-power committee to look into the problems that are likely to crop up once the new system comes into force and rectify them.

The Minister informed the House that the State would suffer an annual loss of Rs 840 crore on account of VAT, which would be compensated by the Centre.

Further, since the new taxation system is more transparent, it would check tax evasion and add to the State's revenue.

He said Kerala was the only State that raised the tax exemption limit of small and medium traders from Rs 5 lakh to Rs 10 lakh even after learning that the Centre would not compensate the consequent loss of revenue.

The Government is examining the proposal to set up 34 checkposts in Idukki, Palakkad, Wayanad, Kasargod, Ernakulam and Kozhikode districts and also form new mobile squads as part of the steps for modernising the Commercial Taxes Department. An inspection wing at the Commissionerate is also proposed.

In reply to a question on the debt burden of the State Government, the Minister said that since Plan expenditure had been going up, it was not possible to bring down public debt. But, the Government has taken the debt-swap route to reduce interest payments.

He said the collection under National Savings had been going up in recent years. The collection was Rs 876.37 crore in 2000-01, Rs 877.40 crore in 2001-02, Rs 1,487.85 crore in 2002-03 and Rs 2,471.62 crore in 2003-04.

The Education Minister, Mr E.T. Mohammed Basheer, who is in charge of Local Administration, said that the Government would convene a meeting of political parties to evolve a consensus on the role and powers of block panchayats.

The Sen Commission report had stated that the Government could make amendments to the Panchayat Raj Act considering the situation in the State.

The Minister for Water Resources and Parliamentary Affairs, Mr Thiruvanchoor Radhakrishnan, said in a written reply that the Government planned to shift the 983 tribal families living in the forests in Wayanad.

This required 700 hectares of land costing Rs 16.8 crore. The Government is planning to form urban forest divisions in Thiruvananthapuram, Kochi and Kozhikode.

In reply to another question, the Minister said that the Delhi Metro Rail Corporation had been entrusted with the task of preparing a detailed project report for establishing a metro rail system in Kochi.

The first phase would be between Kalamassery and Thripunithura and the cost was estimated at Rs 2,400 crore, he added.

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