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Introduce VAT on priority in UP: Assocham

Introduce VAT on priority in UP: Assocham
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First Published: Wed, May 16 2007. 12 20 PM IST
New Delhi: Restoration of a vibrant industrial climate for better economic growth; sound infrastructure facilities; scheduled time for VAT execution, responsive and sensitive machinery for a law and order situation that paves the way for better governance are the major priorities that India Inc. has set for the newly elected government of Uttar Pradesh under Mayawati.
At a random Survey conducted by Assocham in which 300 large, medium and small scale industry representatives belonging to Uttar Pradesh participated, over 85% felt that UP needs industrial revolution in all key segments of economic activity with increasing focus on the second Green Revolution to revive its agriculture and horticulture. It is also home to 78% of the national livestock population.
Complimenting Mayawati on her party’s victory in the recent Assembly elections, 80% respondents felt that she will have to act faster in introducing and putting VAT in place for increased state revenues. Moreso since UP is the only state that is not executing VAT. Also, experience has shown that the State and UTs that have executed VAT have seen their revenues going up substantially. Businessmen in the state have been demanding implementation of VAT in the State while small trades have been opposing it out of sheer ignorance.
As per estimates approximately 60,000-70,000 SSI and large and medium enterprises are seeking rejuvenation and revamping. These industries are providing employment opportunities to nearly 35 lakh persons.
Small and medium industry to get a boost
Over 75% businessmen, hoped that with the new government in place, industries, especially medium and small scale will get a boost. The industry chamber suggests that large investment from domestic and foreign investors can be sought by introducing new schemes with incentives for sectors like manufacturing, power generation, roads, highways and real estate. In 2006, the state received investment proposals worth $ 6 bn most of which did not materialize.
More than 150 companies like Mahindra, Bajaj, Hero Honda, LG, TVS, Onida, Polar, Lumex and some SSI industries have shifted from Uttar Pradesh and the list will multiply if the industries have not been given adequate incentives.
60 companies who have their base in UP earlier have established their operations in cities and towns like Haridwar, Rudrapur, Haldwani, Roorkee, Ramnagar, Dehradun in Uttarakhand, Parwano, Solan, Una, Baddi, in Himachal and Panchukla, Mohali in Chandigarh.
Agriculture and allied services account for 32% of state’s GDP, services sector for 42% and industry 26%. The Gross state Domestic product (GSDP) of the state at current prices in 2004-2005 (as of Feb 2006) was Rs 235678 crore) and the Gross state Domestic product (GSDP) at constant price (1993-94) in 2004-2005 (as of Feb 2006) was Rs 127560 crore.
The Net State Domestic Product (NSDP) of the state at Current Prices (2004-05) was Rs 205249 crore) and the Net State Domestic Product at Constant Prices (1993-1994) for (2004-05) was Rs 109768 crore). Per Capita Income of the state at current prices (2004-2005) stand at Rs11477.
Disappointment over falling law and order standards
All the business and traders participated in the Survey expressed his disappointment over the present law and order situation in the State as the cases of kidnapping, threats to business and traders are rising and new investors especially the foreign investors are taking cautious steps before investing in UP.
Over 70% industrialists felt that labour unrest in state is one of the major reasons for the dismal situation of industrial development and with government’s positive attitude and interactions with industry. However,respondents also felt that the State has a large pool of inexpensive labour force which should be utilized in developmental activities in various projects.
Enhance budget for infrastructure development
Over 45% respondents expressed the need for enhancing budgets for improvement of roads in States for overall economic development. In 2006, budget for roads was Rs 5583 crore. The total road length in the State is 1,04,137 km. This includes 3,912 km of national highways, 9,098 km of state highways, 87,248 km of important district roads, 91,127 km of other district roads and 72,931 km of rural roads.
Prestigious industries like Asian paints, Arihant Industries, Avon Cycles, Atma Steel, Ambuja Agro, Bindal Agro, Bhushan Steel, BHEL, BEL, CEL, DCM-DAEWOO, Dalmia, Delhi Press, Escorts, Glaxo, Goodlass Nerolac, Hawkins, Hindustan Lever, Hindustan Petroleum, Indo-Gulf Fertilisers, JP Industries, Jain Tube, LML, Nirma, Nicco Batteries, Paam Pharma, Pepsi, Parle, Raunaq, Raymonds, Rathi Steels, Swadeshi Polytex, SRF, Nippon Denso, Shamken Multifab, Super House, Somaiya Organics, Telco, Tata Fertiliser, Vam and Williard India are situated in various industrial areas of UP.
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First Published: Wed, May 16 2007. 12 20 PM IST