| A decision is expected to be taken on the issue when the policy matters related to the industrial sector will be reviewed by chief minister Y S Rajasekhara Reddy in a couple of days. |
| The previous Telugu Desam government had stopped offering tax incentives to new industries following the recommendations of a national committee of state finance ministers headed by the West Bengal finance minister. |
| It may be recalled that the national committee had strongly argued against offering such incentives and pointed out that it led to unhealthy competition among the states, besides resulting in loss of revenue worth crores to the state exchequer. |
| But, with the West Bengal government itself going back on the implementation of these recommendations and offering cash subsidies in place of tax incentives, it did not make sense for a state like Andhra Pradesh which was chasing investment to follow the recommendations of the national committee, according to Andhra Pradesh's state industries minister Botcha Satyanarayana. |
| The Karnataka government is also said to have issued a government order (GO) revising the tax incentive system in the state. |
| Going by the mood in the higher echelons of the state government, it is now clear that several new projects, which include the proposed Volkswagen plant which is expected to be set up at Visakhapatnam, might be considered fit cases for offering tax incentives. |
| The competition among several states, especially among the southern states has been very high with regard to the prestigious international car projects like the ones proposed by German companies Volkswagen and BMW. |
| In fact, both the German car majors are expected to announce their plans on the selection of site for their proposed Indian operations in the next couple of months. |
| Against this backdrop, the state government move to review the earlier policy on tax incentives has assumed significance. |
Top Section
Explore Business Standard