After announcing rate cut in power tariff for the industry, Punjab government is now eyeing another move to impress industrialists. According to sources, deputy chief minister Sukhbir Badal may soon rationalise VAT on various items and there is also a high probability that several items, especially cycle and parts may become VAT-free. All this is said to be part of a package which the deputy chief minister Sukhbir Badal has devised after consultation with his top bureaucrats, heads of various trade and industry boards to counter strategy of other political parties who are taking mileage by claiming to give freebies to industrialists after they come to power.

Regardless of this being an outcome of political compulsion industrialists are eagerly waiting for the government to give them this relief. According to Charanjit Singh Vishivkarma, president of United Cycle and parts manufacturers association, "Rate of VAT on cycle parts is quite high as compared to other states and in some states, the cycle parts and cycle has been made tax free which is giving an edge to the bicycle manufacturers based in those states. I think its high time that government takes a decision on high rate of VAT applicable on the cycle industry, we are hopeful that a decision will be taken soon."

Meanwhile, some industrialists are of the view that reducing VAT will prove to be only a temporary relief to the industry. According to Narinder Bhamra, president of fasteners manufacturers association of India, "This is nothing more than a political move and will not prove to be of great benefit to the industry as days of state tax like VAT are short-lived because GST will be rolled out soon. Had the state government been serious on improving plight of our industry, decisions like these should have been taken long ago and not when elections are approaching." Around one and a half years ago, the deputy chief minister had announced that VAT on sewing machine and cycle industry will be brought down to zero, but inspite of the promise, there was no cut on VAT.