K'taka seeks compensation for CST revenue loss

Government estimates shortfall at Rs 1,500-2,000 crore

Karnataka has requested the Centre to compensate it for the likely loss of Rs 1,500-2,000 crore revenue from the reduction of central sales tax (CST) in stages from next year, Karnataka minister for finance, industries and infrastructure, P G R Sindhia said.

"We have requested Union finance ministry and will take the issue up once again with finance minister P Chidambaram in the meeting of VAT implementing states in Delhi on December 5," he said.

Briefing reporters here on Friday, on the outcome of his meeting with various Central ministers in Delhi on Thursday, Sindhia said at least two years will be needed to completely stabilise the new value added tax (VAT) system in the state.

He said, the state government has sought Rs 200 crore in loan assistance at a rate of 4 per cent from the Sugar Development Fund (SDF) to revive 20 sugar mills in both the co-operative and private sectors in the state.

The government proposes to revive the ailing sugar factory owned by the Mysore Paper Mills at Bhadravati for Rs 40 crore. Union agriculture minister Sharad Pawar has promised the state, he will consider the request, he added.

Another Rs 20 crore is being released by the government to set up a co-generation plant by the Mysugar mill, he said.

The government has also requested the Central agriculture ministry to release 21,000 metric tonnes of sugar to the public distribution system. "It is proposed to increase

PDS sugar allocation to 3 kg per card per month and it will benefit 70 lakh card holders in the state."

As of now, the ration card holders in the state are given only one kg sugar per month.