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Uniform VAT mooted to encourage flux of firms out of Delhi.

New Delhi, April 28 -- The National Capital Region comprising cities and towns from neighbouring States should introduce uniform VAT rates to encourage shifting of businesses from Delhi and ease pressure on its infrastructure, a parliamentary panel has held.

The Standing Committee on Urban Development identified lack of uniformity in tax rates in the NCR areas as a main reason for concentration of trade and industries in Delhi and said prompt steps should be taken to make the region "a unified area in economic terms." Besides Delhi, the NCR region comprises parts of Haryana, Uttar Pradesh and Rajasthan.

The Delhi Government has all along been maintaining that concentration of businesses and services in the city has resulted in increasing influx of people from other states to the city putting a lot of pressure on its infrastructure. Chief Minister Sheila Dikshit had also strongly pitched for making the satellite towns in and around Delhi a common economic and taxation zone, a move she felt will cut down the increasing flow of migrants into the city.

The Parliamentary Committee has asked the NCR planning board to pursue the matter of introducing uniform VAT in the region with the Union Finance Ministry and concerned states. The NCR Planning Board, an agency under Union Urban Development Ministry, coordinates various developmental projects among constituent states of the NCR region

'"The Committee feels that uniformity in VAT (Value Added Tax) rates in the NCR region would encourage business establishments to shift out of Delhi to set up businesses in the NCR region without suffering any financial loss," it said.

The Committee, headed by JD(U) MP Sharad Yadav, felt removal of fiscal barriers would not only result in harmonious and balanced development of NCR region but also help decongest the national capital. It said lack of uniformity in tax rates for various commodities and services in the constituent states leads to concentration of trade, industry and services in the national Capital.

The panel, in an earlier report had said that the number of industries in the capital had increased from 26,000 in 1971 to1,37,000 in 1999. The committee also asked the constituent states to make concerted efforts to implement the Regional Plan 2021 which was formulated by the NCR Planning Board for overall development of the region.

It also criticised Delhi Government for failing to prepare a sub-regional plan as part of the broader regional plan for the region. The NCR Planning Board had asked all the constituent states to prepare sub-regional plan for overall development of the region.

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Publication:The Pioneer (New Delhi, India)
Geographic Code:9INDI
Date:Apr 28, 2010
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