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Uttar Pradesh will fully support measures to further reduce taxes on Covid relief items such as ventilators, oxygen concentrators, PPE kits etc to improve their cheaper access to the masses and help the nation to be better prepared for any possible fresh wave of Covid-19 pandemic, a state minister said on Wednesday.

State Finance Minister Suresh Kumar Khanna said that the state is favour of reducing taxes on Covid relief items meant for those contracting the virus and Group of Ministers set up by the GST Council is looking into the issue and will come back with its suggestions soon.

Khanna is also a member of the GoM and support of the state for the duty cuts is expected to carry weight on the decisions that the GoM takes on the matter.

He said on its part, the state has offered relief to people in the worst of times during the build up of the pandemic last year by keeping its own VAT rates unchanged on key fuel items such as petrol and diesel. He indicated that the current rate of VAT of Rs 26.80 per litre on petrol and 17.48 per litre on diesel may not increase during the second wave of the pandemic as well and resources needed for meeting growing expenditure would be met from other sources like promotion of industrialisation of the state, development of infrastructure and generation of non-tax revenue.

"We want to maintain complete fiscal discipline even in these difficult times. This would not mean that state would cut expenditure and reduce funding for welfare schemes. Resources would be mobilised through other measures that also promotes industrialisation and generated growth," the minister told select journalists.

Khanna also said that things on fiscal front for the state were much better compared to last year when lockdowns and Covid pandemic impacted economic activities badly. In terms of tax collections, the states revenue fell to just about 77.47 per cent of target in FY21 against 87-97 per cent collections in previous three financial years.

He said that in this year(2021-22), despite the new wave of Covid, tax collections in the first two months have been in excess of Rs 9,800 crore and Rs 2,452 crore over previous years. "We are confident that tax collections would touch 87-97 per cent levels this year as the state's lockdowns don't involve shutting economic activities as industries and businesses continue to operate."

The minister also said that the state government has also worked to provide money directly into the accounts of workers that helps in keeping the wheel of economic activity moving without much disruptions. Besides, funds to MSME segment had also been facilities through a three fold increase loans to the sector at around Rs 63,000 crore that has also helped in generation of jobs and livelihood support to over 34 lakh people.