UP industry unhappy with Budget

UP Chief Minister Mulayam Singh Yadav may have presented a Budget for the elections slated for next year, but discontent is growing both within the industry and among traders, over the lack of incentives in the Budget.

Manikant of Udyog Vyapar Mandal, a representative body of traders, told Business Standard since revenue collection had increased from Rs 9,000 crore to Rs 11,000 crore, the government should have provided incentives to industry.

"Besides, we had asked the state government to give incentives for establishment of industry, close to the cities, so that this may help trade to develop. We had further asked the government to provide electricity at cheaper rates. If Uttaranchal is providing power at Rs 2 a unit and UP at Rs 4 a unit, it is clear that the units will go to the former. And if UP does not do anything, then of course industry will find it difficult to survive," he said.

Asked about VAT, Manikant said it was good that the government had not imposed VAT as it would vitally affect smaller traders who traded within the state and constituted 90 per cent of the traders.

As for now, they are outside the tax bracket. But with VAT, they will be part of it and will have to do the paper work, for which they are not competent.

However, there is increasing concern in the industry and traders that if VAT is not implemented, the industry will loose out to other state.

Traders realise the interconnection between the two, although they do not subscribe to VAT. Nevertheless, they admit that this may lead to further migration of industry. The government, they feel, is not realising the damage it is doing to the state.

The modification in Form 31, which it had done only a few days back, had to be withdrawn under vociferous protest from traders. The change dropped was that goods could be imported in one form irrespective of their value.

The modification was that for different values, different forms were to be used. This was withdrawn. These issues are not basic, but government is not concerned. They concede that VAT will not be implemented before the next elections, schuled for next year. Thus all in all it is thoroughly disgusting situation for the state's business classes.