Date:06/01/2006 URL: http://www.thehindu.com/2006/01/06/stories/2006010607590400.htm

Karnataka - Bangalore

Sindhia wants VAT system revamped

Special Correspondent

`This will help the Government increase revenue from the tax'

Many officials and traders are not aware of the provisions of the VAT law

The VAT software developed at a cost of Rs. 20 crores is yet to become operational

BANGALORE: Minister for Finance and Industries P.G.R. Sindhia has said there is no political will in the State to accelerate the growth rate and eliminate regional imbalances.

Inaugurating a daylong seminar on "Karnataka Development Report", at the Institute for Social and Economic Change here on Thursday, he wanted the people to pressure the Government to execute development projects without delay. He stressed the need for revamping the value added tax (VAT) system in the State to mobilise more revenue from the tax.

The State has implemented VAT without any preparation in the current financial year. Although the VAT Act was introduced in 2003, many junior officials and traders are not aware of the provisions. The software which was developed at a cost of Rs. 20 crores for introduction of VAT is yet to become operational. "There are systemic problems in VAT implementation," he said.

In view of the financial constraints, the public-private partnership (PPP) is the best model for implementing infrastructure projects, Mr. Sindhia said. The PPP model will be used in the execution of airport projects, including the Bangalore International Airport at Devanahalli. It could be used for improving public delivery of services, particularly health, he said.

Computerisation of the Treasury Department has helped reduce corruption, he said. The Government has decided to set up a Ramakrisha Hegde (former Chief Minister) Chair at the ISEC in recognition of his contribution to the State in various aspects of development. Chief Minister N. Dharam Singh has agreed to grant funds for the purpose, Mr. Sindhia said.

Gautam Basu, Principal Secretary, Planning Department, said the report has been prepared with the financial assistance of the Planning Commission and the Planning, Statistics, and Science and Technology departments. The report provides valuable information on several aspects of development and administration, he said.

S.L. Rao, Chairman of ISEC's Board of Governors, said the PPP model should be extended to small towns and cities so that projects can be executed without delay.