The Hindu Business Line : Kerala wants liquor, petrol out of VAT

THE State Government would like to see that liquor, petroleum and diesel are kept out of the purview of the value-added tax and stay clear of the likely adverse revenue implications, the Finance Minister, Mr K. Sankaranarayanan, told the State Assembly on Wednesday.

Replying to questions, the Finance Minister said exemption was also being sought for some locally produced items such as coir goods.

The State Government had also demanded of the Centre that any shortfall in tax revenue resulting from implementation of VAT be made good. Also, it should be willing to share a portion of service tax with the States.

At least the southern States should seek to settle to a uniform rate of tax on items under the VAT system if only to plug a potential hole in the tax revenue structure, Mr Sankaranarayanan said.

Sales tax collection for 2003-04 stood at Rs 6,081.13 crore against a targeted figure of Rs 6,200 crore. As per provisional figures released by the Accountant General, revenue receipts stood at Rs 11,733 crore and revenue expenditure at Rs 15,504 crore, making for a revenue deficit of Rs 3,771 crore. The fiscal deficit was Rs 5,296 crore.

Replying to another question, the Minister said the State Government proposed to enact a comprehensive legislation to control private money lending institutions. The Law Department was examining a draft Bill prepared for the purpose.

Education loans: The Chief Minister, Mr A.K. Antony, told the House that the State Government would initiate all steps to see that national banks made available education loans for all needy students.

As per he guidelines issued by the Reserve Bank, no collateral security should be insisted for education loans of up to Rs 4 lakh, the Chief Minister said in reply to a calling attention motion.

Instances of denial by certain banks of these loans have been brought to the attention of the State Government. These would be seriously followed up at the meeting of the consultative committee of the State-level bankers' committee (SLBC). The Centre and the Reserve Bank would also be petitioned in this regard and to bring the erring banks to book.

Forest fires: Over a thousand cases of forest fires have been reported from the State during this year but razing down of entire stretches has not occurred, according to the Forests Minister, Mr K. Sudhakaran.

Human error was found to be the root cause for a large number of all major fire incidents, the Minister said. The State had 11,221 sq. km of Government-owned forests, which constituted 87 per cent of the extent of forest cover required to keep ecological balance. But, the State's forest cover was better than the national average.