Tamil Nadu lost Rs 2,577crore central grants due to failure to hold local body polls, govt white paper says

CHENNAI: The failure of the previous AIADMK regime to hold the local body elections in Tamil Nadu cost the exchequer badly. In all, the state lost Rs 2,577.29 crore of central grants in the financial years 2017-18, 2018-19 and 2019-20, according to the white paper released by finance minister Palanivel Thiagarajan on Monday.
The grants, even those recommended by the Finance Commission, were not released in time for a variety of reasons. “The non-release of substantial portion of grants to local bodies recommended by the 14th Finance Commission in the three fiscal years due to the failure to hold local body elections in time is a case in point,” Thiagarajan said.
Going by the recommendations of the fifth state Finance Commission, 10% of the net state own tax revenue is being devolved to the local bodies. It is shared by the rural and urban local bodies in the ratio of 56:44. Despite substantial devolution, local bodies have not been paying for electricity and water availed from Tangedco and Twad Board (Tamil Nadu Water Supply and Drainage Board). The outstanding electricity charges of the local bodies stand at Rs 1,259 crore, while water charges at Rs 484.1 crore.
The non-payment of dues to the Tangedco and Twad Board created a vicious cycle of weaker local bodies putting additional pressure on the status of inefficient, poorly functioning PSUs/boards, which eventually created further liabilities for the stake holding institutions and the state government, the finance minister said.