The State Cabinet has approved the revision in base VAT (Value Added Tax) rate from existing four per cent to five per cent, a move that is expected to generate Rs 400 crore additional revenue annually.

The revision in base VAT rate is going to be reflected in the State Budget for 2012-13. An expert committee formed by the state government under the chairmanship of Sanjeev Hota to suggest revenue augmentation measures had also recommended to this effect. Sources said the finance department will levy VAT on sugar and textiles as well. It may be noted that after announcing VAT rate of four per cent on these two products last year, the government was forced to withdraw the levy following intense pressure from the agitating traders.

Meanwhile, The State Council of Ministers approved budgetary allocation for two newly constituted departments- Micro Small and Medium Enterprises (MSMEs) and Department of Technical Education, Employment and Training.

The two departments which were constituted through a notification of the state government on December 19 were in a non-functional state until recently when secretaries were appointed for these departments.

While Nikunja Sundaray was named principal secretary for MSME department, C S Kumar, former secretary of department of higher education, is at the helm of the department of technical education, employment and training.

These departments have been formed following restructuring of departments of industries and labour & employment.The Council of Ministers meet was followed by meeting of the State Cabinet which okayed IPR (Industrial Promotion Resolution) concessions for captive generating plants with a in-house power consumption of at least 51 per cent.

It was also decided to initiate a Bill in the ongoing session of the state assembly to create the Orissa Industrial Security Force (OISF) on the lines of Central Industrial Security Force (CISF).

The Cabinet also approved 11 out of 13 Lokpal reports that came up for its scrutiny besides clearing three matters related to revenue department. In toto, there were 23 topics in the agenda of the State Cabinet. (Business Standard)