States should fix floor rates, Kerala Finance Minister

New Delhi, Jun 15 (UNI) Kerala Finance Minister T M Thomas Issac today said that states should have the freedom to fix floor rates which is currently pegged at 12 per cent.

Dr Issac said the state is currently running at a loss.'' Other states have reflected a rise in revenues except for Kerala,'' he said at a press conference here.

The Minister said the centre should make the pricing of petroleum products transparent and the basic rates on these products must be decreased.

The Minister was speaking after an Empowered Committee meeting on Value Added Tax (VAT) by state Finance Minister's in capital.

Mr Issac had said earlier that a public debate was needed on how to implement the Rs 6,400 crore plan presented by the previous government in the wake of the worsening financial position of the state.

"Kerala has been declared as a debt-stressed state by the Centre.

It is now difficult to get external aids or loans. The options before us include Plan cut," Mr Issac told a meet-the-press programme in Thrivananthapuram recently.

He said the state's liability rose by Rs 1900 crore with the ADB loan, the loans for externally-aided Kerala State Transport Project and drinking water scheme. The state had availed Rs 450 crore from NABARD, he said.

He said the new government would try to increase non-tax revenue and has called for a re-examination of the mode of implementation of VAT.

UNI/RT CS HT1742