By Bizodisha Bureau in Bhubaneswar, June 28, 2016 : The Naveen Patnaik government finally succumbed to pressure from traders and business men with the Tuesday’s Cabinet approval of a proposal to reduce Value Added Tax (VAT) on all kinds of pulses to one percent from existing five percent for three months starting this July 1.

“When prices of these essential goods are high, the retail prices of these goods become very high if tax is added to the base price. We are implementing VAT on all kinds of pulses at 1 percent for only three months on a trial basis,” Odisha Chief Secretary Aditya Prasad Padhi on Tuesday said.

Padhi further informed that the State Government used to earn revenue of Rs 45 crore from pulses with the VAT set at five percent.

“The objective behind the reduction of VAT on pulses of all kinds is to control the prices in the market and also to avoid strikes by traders. We hope the revenue collection will not be affected and at the same time people can get pulses at affordable price,” he added saying that the reduced VAT will aid blocking smuggling of pulses from other states.

Apart from the decision on VAT on pulses, the cabinet today gave its nod to 13 other proposals in the meeting chaired by Chief Minister Naveen Patnaik.

One of the proposals is to extend the Odisha Adarsh Vidyalaya (CBSE pattern model schools) scheme to all 314 blocks of the state at a cost of Rs 2600 crore over next five years. As of this academic session, only 100 model schools are operational in the state. While the government plans to set up 100 more schools by 2017-18, the remaining 114 schools are likely to come up by 2018-19.

The cabinet also approved proposals pertaining to amendment of Veer Surendra Sai Institute of Medical Science and Research (VIMSAR) Act to ensure that its vacancies are filled up and approved 500 new posts in the Health Department.

Besides, a new scheme OTS-2016 was approved for Industrial Promotion and Investment Corporation Limited (IPICOL) keeping in mind its changes in operational strategy after it stopped its financial activities in 2005-06.

“This approval of the State Government will enable IPICOL to recover its dues and other financial activities. IPICOL had earlier introduced various one time settlement schemes since 2002-03 to recover loan dues from the NPAs and the last policy adopted was amended,” said Padhi.

Even though IPICOL provided long term financial assistance and equity participation earlier, its Certificate of Registration as Non-Banking Financial Company (NBFC) was cancelled by the RBI back in 2013.