Bhubaneswar, Aug. 18: Chief minister Naveen Patnaik today met Union petroleum minister Dharmendra Pradhan in New Delhi today to sort out the issue of tax exemption to IOCL's Paradip refinery project and state's demand for more than Rs 2,700 crore from the company as dues towards VAT exemption.
The meeting was held in the backdrop of an acrimonious war of words between the state and the Centre over the issue and Orissa High Court's direction to find out an amicable solution.
Emerging from the meeting, Naveen said: "We discussed how to find a solution to the IOCL problem. We hope to find an amicable solution as far as the state government is concerned."
Though Naveen was not specific about the outcome of the meeting, Pradhan said: "The state government had signed an MoU with the IOCL in 2004. But with the change of time, the conditions of the MoU do not suit the interests of the Odisha government. In the larger interests of people of the state, the MoU can be changed."
The ruling party was also divided over whether the chief minister should have met Pradhan with BJD vice-president and agriculture minister Damodar Rout taking exception to the meeting and saying it would have been better had the state government summoned IOCL authorities and discussed with them the violation of the conditions laid down in the MoU between the company and the state government.
However, the BJD had defended the meeting saying that the central minister would be meeting the chief minister at Odisha Bhavan.
An official release of the government of India said Pradhan felt that though the state had extended the tax concession in 2004, there was a necessity to find an amicable solution to the present impasse keeping in view Odisha's fiscal health and IOCL's commercial interest.
He emphasised the need for finding a middle path, wherein both the IOCL and the state government could work out a mutually acceptable solution by climbing down from their stated positions.
Pradhan felt it was important for the state government to provide incentive to the IOCL's expansion plans to create petrochemical and downstream industries in Odisha. Over a period of time, it will enable the state to increase its revenue and also create additional employment avenues for youths in Odisha.
At the meeting, Pradhan said the solution would lay the foundation of a new industrial ecosystem, facilitating industrialisation and fiscal consolidation.
"This is in keeping with the vision of the Prime Minister to provide adequate resources for development and industrialisation of eastern India, including Odisha," he said.
Senior officials of the petroleum ministry, the IOCL and Odisha government were present during the meeting between Naveen and Dharmendra. They had met earlier several times and had failed to arrive at a negotiated settlement.
The war of words between the two sides had escalated following the state government's withdrawal of tax concession to oil refinery on the ground that the project had started making profit.
The state is also demanding Rs 2,745 crore towards VAT exemption. Later the issue reached the high court that directed the working group committee comprising authorities of both state government, Centre and the IOCL to sort out the issue.
