Industrial units may be paid cash or given option to set off entitlement against future sales tax payments.
The Karnataka government has decided to clear Rs 147 crore subsidy dues that it owes to a few hundred industrial units by adjusting their entitlements against future sales tax payments.
The state government is likely to present the option to companies on whether they want it in cash or want the same to be set off against sales tax. We do not want to carry this liability in our books anymore. We have spoken to most of these companies, who have accepted our proposal to set off their subsidy entitlement against future sales tax payments, said a senior official in the industries department. The state cabinet has accorded its approval to this as a one-time measure, he added.
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The pending subsidy, amounting to Rs 147 crore, covers the period upto June this year. The state government provides subsidies ranging between Rs 5 lakhs to Rs 75 lakhs to small-scale and medium-scale industrial units coming up in the state. The decision to start afresh without any pending dues was insisted upon by the finance ministry in view of the fact that the industries ministry led by R V Deshapande is busy formulating a new industrial policy. According to Deshapande, the new policy would strive hard to be industry friendly by simplifying regulations and procedures.
In a move to attract greater infrastructure investment in the state particularly in major cities like Bangalore, Mysore, Hubli-Dharwad and Belgaum, the ministry is also likely to simultaneously come out with a new infrastructure policy.
The government is keen to ensure that all investment proposals which have been approved would start operations within the next 30 months, by which time the assembly polls are likely to be held. The Patel ministry which has just completed a northern Karnataka tour has decided to provide special incentives to industrialise this backward area and remove regional imbalances that have crept in, forcing the people of this neglected area to demand for a separate state. After the recent tour, described by the ruling party as a government on wheels reaching out to the masses the cabinet decided to set up a high power committee headed by chief secretary B K Bhattacharya to prepare a plan of action to remove regional imbalances, if any.
After the Hubli cabinet meet, Chief Minister Patel had said: Though I do not subscribe to the view that there are regional imbalances, I have constituted the committee to ensure such feelings gets erased with a plan of action. The committee is expected to submit its report within two months, he added.