The National Capital Region (NCR) should introduce uniform Value Added Tax (VAT) rates to encourage shifting of businesses from Delhi and ease pressure on its infrastructure, a parliamentary panel stated.
The Standing Committee on Urban Development identified lack of uniformity in tax rates in NCR areas as the reason for concentration of trade and industries in Delhi and said prompt steps should be taken to make the region "a unified area in economic terms."
Besides Delhi, the NCR region comprises parts of Haryana, Uttar Pradesh and Rajasthan.
The Delhi Government has maintained that concentration of businesses and services in Delhi has resulted in influx of people from other states to the city, putting pressure on its infrastructure.
Chief Minister Sheila Dikshit had pitched for making the satellite towns in and around Delhi a common economic and taxation zone, a move, she said, that will cut down the growing flow of migrants into Delhi.
The parliamentary committee has asked the NCR planning board to pursue the matter of introducing uniform VAT in the region with the Union Finance Ministry and concerned states.
The NCR Planning Board, an agency under Union Urban Development Ministry, coordinates various developmental projects among constituent states of NCR.
"The Committee feels that uniformity in VAT rates in the NCR region would encourage business establishments to shift out of Delhi to set up businesses in the NCR region without suffering any financial loss," the NCR Planning Board said.
The committee, headed by Janata Dal (United) Member of Parliament, Sharad Yadav, felt removal of fiscal barriers will not only result in harmonious and balanced development of NCR region but also help decongest Delhi.
It said lack of uniformity in tax rates for various commodities and services in the constituent states leads to concentration of trade, industry and services in Delhi.
The panel, in an earlier report had said that the number of industries in the capital had increased from 26,000 in 1971 to 1,37,000 in 1999.
The committee also asked the constituent states to make concerted efforts to implement the Regional Plan 2021, which was formulated by the NCR Planning Board for overall development of the region.
It also criticised Delhi Government for failing to prepare a sub-regional plan as part of the broader regional plan for the region.
The NCR Planning Board had asked all the constituent states to prepare sub-regional plan for overall development of the region.