With the State government’s surprise announcement about the Pongal festival gift of ₹1,000 for every family ration cardholder, the State’s ever-growing revenue deficit for the current year is likely to touch ₹20,000 crore.

As the gift will be given to all cardholders, numbering around 2.01 crore, this will cost the exchequer a little less than ₹2,020 crore, an expense which the government did not factor in at the time of preparation of the budget for 2018-19.

It was only about 10 days ago that the government took the decision to give the Pongal gift.

The original Pongal hamper, announced a few weeks ago, would include one kg each of raw rice and sugar, a piece of sugarcane, 20 g each of cashew and dry grapes, and five grams of cardamom. The latest gift would be over and above the hamper.

According to the budget estimates for the current year, the revenue deficit was estimated at about ₹17,490 crore.

If the latest move was taken into account, the deficit would exceed the ₹20,000-crore mark.

During 2016-17, the revenue deficit was around ₹12,964 crore and in 2017-18, it was approximately ₹18,370 crore.

Governor Banwarilal Purohit in his address to the Assembly on Wednesday acknowledged the trend of growing revenue deficit in recent years, but attributed it to “the devolution formulae evolved by the 14th Finance Commission which has adversely affected the State finances.”

Besides, the implementation of Ujwal Discom Assurance Yojana (UDAY) and 7th Pay Commission recommendations had widened the revenue deficit, the Governor pointed out.

Conceding that the latest move would cause “further strain” on “precious resources” of the State government, a policymaker contrasts the situation of Tamil Nadu with other States, which have hit the headlines in the recent times for their freebies.

Lesser burden

While the cost of the Pongal freebie scheme would be around ₹2,277 crore which includes the cost of the originally-announced gift pack, the cost of loan waiver for farmers in Madhya Pradesh is expected to be in the range of ₹35,000 crore to ₹38,000 crore; in Rajasthan, ₹18,000 crore and in Chhattisgarh, ₹6,100 crore.

In Telangana, the scheme of Rythu Bandhu, envisaging a dole of ₹4,000 per acre per cropping season to each farmer, is expected to cost ₹12,000 crore this year. Compared to these measures, the scheme of Tamil Nadu is much cheaper, the policymaker points out.

Meanwhile, the government is still deliberating the mode of payment of the amount of ₹1,000.

Even though the Governor announced that it would be a cash support, the authorities are exploring the possibility of making the payment through bank accounts, even though they are conscious of paucity of time of making such an arrangement.