Karnataka Govt stays industry-friendly

BANGALORE: The new Karnataka Government on Saturday tried to present an industry-friendly face, by stating its intention to withdraw or reduce the tax on captive power generation, imposed by the previous regime.
Speaking on behalf of Chief Minister N Dharam Singh at a meeting of the Confederation of Indian Industry''s Southern Regional Council, state water resources and transport minister Mallikarjun M Kharge said that he "would review this situation (the tax) afresh for possible relief�.
Last year, the S M Krishna regime had announced a tax of 50 paise per unit of captive power generated by private companies, a move that did not go down well with industry at all. Industry already pays high rates for electricity as part of a tariff structure that helps the government subsidise power supplied to farmers.
Kharge also expressed the need to introduce second-generation reforms at the earliest, and said the government was examining innovative means for raising resources for infrastructure initiatives and for strengthening public-private partnership in implementing these projects.
However, Kharge, who had made a suo moto statement on the tax on captive power generation, was non-committal on other issues raised by CII members at the meet. In response to a question on the high power tariffs, Kharge noted that Karnataka had been at the forefront of power reforms and cutting power subsidies. "But you know what happened in the elections. We lost in rural areas,� he said, clearly indicating that the policy had backfired.
On labour reforms, he said the government was open to the review of certain labour laws but made it clear that a balanced policy was required, one that would safeguard both labour and industry interest.
CII appeared, on the whole, to be quite happy with its first interaction with the new government. Speaking to reporters after the event, CII (Karnataka) chairman K K Swamy said Kharge''s message was encouraging and particularly appreciated statements on the tax on power generation and the need to begin second-generation reforms.
And if he was disappointed with the chief minister''s absence at the meet, he certainly did not show it. "The CM is busy with the government formation process,� Swamy said.