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The Utkal Chamber of Commerce and Industry (UCCI), the apex industry body in the state, has urged the state government to give interest subvention for the micro small and medium enterprises (MSMEs) to boost manufacturing sector.
“It is very important to spur growth in the manufacturing sector which has come down drastically in the recent years. Therefore, the government should consider interest subvention of two to three per cent for the MSME sector,” UCCI said in its memorandum presented at the pre-budget consultation meeting held recently. Stating that generation of renewable energy should be encouraged, UCCI said, the state government may also consider interest subvention of two to three per cent for renewable energy projects, particularly in the field of solar power.
It may be noted that investments worth Rs 2,500 crore are expected to flow to Odisha in the renewable energy sector during the 12th Plan Period (2012-17). The state has targeted capacity augmentation of 350 Mw from solar, wind and bio-mass sources during this period.
Renewable energy potential in the state has been assessed at 16,230 Mw by Odisha Renewable Energy Development Agency (OREDA).
For encouraging the downstream industries, particularly in the aluminum and steel sector, the industry body has urged the government to lift restrictions on availing the input tax credit.
“As and when they (downstream industries) sell their products outside the state to registered dealers, they will be able to avail the input tax credit of only two per cent and balance three per cent (from five per cent per cent paid on the raw materials) will be borne by them. Since such restrictions are not there in the other states, this cripples the downstream industries in Odisha on aluminum and steel sector. That is why probably downstream industries are not coming up in these sectors in Odisha inspite of highest production of aluminum and steel ingots in the state," the memorandum added.
The industry association rued that in Odisha, entry tax is levied when the goods are moved from one local area to another while the tax is levied in other states only when the goods are brought in from a different state.
Such tax structure adversely affects the aluminum downstream industries as they have to pay one per cent entry tax on purchase of raw materials from within the state, but when they sell the products to consumers outside the state, no entry tax can be recovered. Hence, the one per cent has to be borne by the downstream industries, UCCI argued.
The apex industry body wants the state government not to increase the tax rate, but widen the base to augment tax revenue. It also proposed for imposition of exemplary punishment for the tax evaders.
UCCI wants more emphasis on collection of non-tax revenue.
It proposed that holding tax should be collected by panchayats as a large number of colleges, commercial establishments, warehouses are operating outside the municipal or notified area councils (NAC) limits. These institutions are making profit out of their operation, but do not pay holding tax or property tax to the government.
Ramesh Mohapatra , President, UCCI said, we have presented our proposals to the state government for consideration. The first session of the 15th Odisha Legislative Assembly will begin from June 12 and continue till July 28.
