Kassia seeks Rs 500 crore infrastructure fund

Wants aviation components cluster at Bangalore

The Karnataka Small Scale Industries Association (Kassia) has sought more attention towards infrastructure development in the industrial estates in the state. It has also sought the speedy disbursement of subsidies to small industries in the state.

Speaking after presenting the pre-budget memorandum to Karnataka deputy chief minister B S Yediyurappa, Kassia president Hareesh P Hegde said that in the last two years, small scale industries (SSI) has made a good progress and for the pace to pick-up, a satisfactory infrastructure is required.

"To take up infrastructure development, a Rs 500 crore infrastructure development fund should be created. This should help improve the available infrastructure in the industrial estates and industrial clusters," he added.

The association has called for setting up automobile, cashew and marine industry clusters in Dakshina Kannada and an aviation parts and components cluster in Bangalore.

The Industrial Townships Act has been passed in Karnataka. The implementation has been delayed owing to the delimitation of the constituencies.

"The Centre may be prompted to speed up the process to enable the infrastructure upgradation in selected areas under the Industrial Township Act," said Hegde.

The state government has also been urged to amend the Transparency Act so that it is in harmony with the Centre's purchase policy of free tender and earnest money exemption.

According to M C Dinesh, general secretary of Kassia, "It is time the Karnataka government introduced an exit policy for SSIs so that aging entrepreneurs, those having succession problems or those seeking retirement may exit gracefully."

Priority should be given to products developed by SSIs. SSIs' should be brought under the value added tax (VAT) with a single tariff. This will minimise the classification issues and render greater ease and flexibility in diversifying the SSI units.

With respect to industrial inputs, self certification should be made acceptable to avail the 4 per cent rate. SSI VAT dealers are forced to submit monthly returns.

VAT involves plenty of paper work and further, payments for the supply of goods are received only in 60-120 days. Therefore, the VAT returns and payment should be made quarterly.

The issue of tax invoices below Rs 100 may be made optional. The procedure existed under the Karnataka Sales Tax (KST) regime in Karnataka. The refunds due for the taxes paid by exporting units should be in a time-bound manner without procedural hassles.

On the specific cases of taxation, Kassia pointed out that tractor tyres and tubes prices come under 12.5 per cent VAT in Karnataka, where as in Maharashtra and Andhra Pradesh it is 4 per cent VAT. "The disparity leads to a diversion of trade to other states. Therefore the state should bring it down to 4 per cent," Kassia president said.