Thursday, September 22 2005 19:41 Hrs (IST) - World Time -

Bangalore: Karnataka Government has drafted New Delhi-based Indian Institute of Foreign Trade (IIFT) to study the export potential of the State, Finance and Industries Minister P G R Sindhia said today (Sept 22, 2005).

He told reporters here that there is a lot of potential to further promote exports, and the IIFT would make an overall survey, for which the Government has released Rs 20 lakh.

The Minister said a notification has been issued on September 16 bringing down value added tax on coffee, dry grapes, sprinklers, sprayers and drip irrigation equipment, among others, from 12.5 per cent to four per cent.

Sindhia said the Karnataka Government would sign an MoU with Airports Authority of India (AAI) tomorrow (Sept 23, 2005) facilitating development, maintenance and operations of the Mysore airport.

Work on Mysore airport is slated to be completed in two years, he added.

He said the State Government would propose to the AAI to establish airports in Gulbarga and Hassan. The State is ready to contribute Rs 25 crore each for these two airports. The proposal would be pursued with Union Civil Aviation Minister Praful Patel who would be here tomorrow.

Sindhia also announced release of Rs 150 crore, first installment of budgeted allocation of Rs 450 crore, towards waiver of interest on term loans in the agriculture sector. The burden on the state exchequer may go up to Rs 900 crore (from the estimated Rs 450 crore), he added.

According to him, Rs 14 crore had been released as State support to Bangalore International Airport project that's coming up at Devanahalli, near here; and Rs 20 crore for ongoing railway overbridge and railway underbridge projects.

The Minister said the policy of issuing letter of credit to contractors is being reviewed, and a new system is expected to be finalised by October 15, 2005. The attempt is at having 'more transparency' and streamlining procedures.

He said the burden on the State following hike in fuel prices is being studied. He has written a letter to Union Finance Minister P Chidambaram urging a separate fuel policy in respect of consumption by State Government undertakings, and farmers and fishermen.