“Looking at some of the indications such as GST revenue, taxes on fuel and usage of electricity it is clear that we are moving towards pre-COVID-19 time and if the trend continues state economy will return to normalcy in two months,” said Rangarajan, after submitting the report of his committee to Chief Minister Edappadi K Palaniswami.

State government formed an expert committee under former RBI Governor Rangarajan, in May, this year, to suggest the state government about the steps to be taken to revive the economy. The committee after four months submitted a close to 250 page report to Chief Minister with their suggestions.

Addressing the media after submitting the report, Rangarajan said that the economy of the state was badly affected due to COVID-19 pandemic and only if the lockdown is lifted the economy will be revived. The committee had predicted that the economic growth of the state, measured at GSDP, will be 1.71 per centage, said Rangarajan.

On key recommendations to revive economy, Rangarajan said that we have split our recommendations into two, one is the regarding the relief for short term such as continuing the free rice scheme even after November and to implement an employment guarantee scheme in urban areas too, on the line of MGNREGA.

When asked whether the committee had made any recommendations about the unemployment during COVID-19, Rangarajan replied that the committee had advised the state government to spend the Rs 3,200 crore fund of construction labourers and as the case went to Supreme Court there are rules to spend the amount but the amount should be spent as early as possible.

On the the debt situation of the state government, Rangarajan said that no doubt that debt will increase due to shortage of revenue and increase in expenditure for health department and COVID-19 facilities.

The committee has recommended the state government to spend an additional Rs 5,000 crore to health department and due to these spendings fiscal deficit will increase.