FM gets UP on board VAT
Uttar Pradesh with a share of Rs700 crore in Rs15,000-crore central sales tax (CST) may finally agree to implement value-added tax (VAT).

Finance minister P Chidambaram and the chairman of the empowered committee for VAT, Asim Dasgupta, during their meeting with UP chief minister, Mulayam Singh Yadav have secured his tentative agreement on the contentious issue of implementing VAT Uttar Pradesh

So far, UP's hesitation stemmed from fears of losing its share of revenue collections from the CST, unless the central government agreed to compensate for the revenue losses. The UP government had suggested that the Centre abolish the CST in phases, over three years.

Yadav has agreed to implement VAT, but after traders are convinced to do so, saying, "Once traders are convinced, the state government will willfully implement it."

So far, 26 states had agreed to implement VAT and Uttar Pradesh's refusal might make things difficult.
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Telecom to figure in UPA meeting with Left
The government is scheduled to discuss key economic issues, including the recent increase in petroleum product prices and raising the foreign direct investment (FDI) cap in telecom from 49 per cent to 74 per cent with the Left parties at the co-ordination committee meeting tomorrow.

Prime minister Manmohan Singh, who has returned to New Delhi, is expected to be joined by finance minister P Chidambaram and communications and information technology minister Dayanidhi Maran to iron out differences on economic policies with the Left parties and key allies in the UPA government.

The Left parties have criticised the government's decision to raise prices of petrol, diesel and cooking gas last week. They are expected to capitalise on the discontent within the gUPA constituents, to push for a roll-back of the recent petroleum price hike during this meeting.

The prices of petrol are now at import parity, the price of diesel was raised to cover 50 per cent of the under-recovery from the auto fuel.

The Left parties were of the opinion that an increase in oil product prices would further fuel inflation, which reached 7.38 per cent last week. Left front leaders have advocated a downward revision of petrol prices on November 15, when the fortnightly review of petroleum prices is due. This can be done through agencies, if not directly.

In view of the continued decline of petroleum prices, the finance minister had already stated that prices could be brought down during the forthcoming review of petroleum prices and even the proposed monthly hike of on cooking gas of Rs5 per month will most likely be scrapped within a couple of months.
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