Minister Palanivel Thiaga Rajan bears the cross to lead Tamils to the promised land

CHENNAI: Four days after advocating a “once-ina-generation” leap of reforms to pull Tamil Nadu out of a fiscal abyss, finance minister Palanivel Thiaga Rajan on Friday sought to take baby steps to lead the economy towards the promised land.
“The revised Budget for 2021-22 will only impact the remaining six months of this financial year. The sheer magnitude of the second wave of Covid over the past few months and its health and economic consequences have further constrained the government’s flexibility in what was already a precarious fiscal position,” PTR said.

Populism was limited to two decisions — lowering of petrol prices by Rs 3 a litre (against the promised Rs 5), which will cost the government Rs 1,160 crore, and waiving of Rs 2,756 crore loans to self-help groups taken from co-operative credit societies.
He put on hold the crop loan and jewel loan waivers of the AIADMK government citing irregularities. This could result in a saving of Rs 10,000 crore.
“The lack of adequate beneficiary data is the fundamental limitation in our government’s ability to efficiently implement welfare schemes in order to improve social and economic justice,” the finance minister said, while stressing on data-centric governance to reach benefits to targeted sections.
For industry, there is a tax amnesty scheme, plans for land banks in backward districts, and a dedicated FinTech park in Chennai, originally proposed by M K Stalin when he was the deputy CM. Besides, there will be three more TIDEL parks and a few more Sipcot estates and food parks.
Thiaga Rajan did not impose any new levies citing the pandemic. “Given that the economy is just recovering from the impact of successive waves of the Covid-19 pandemic, the time is not yet ripe for fiscal consolidation,” he said, while letting the “revenue deficit” climb to Rs 58,692 crore from the “unrealistic” interim budget estimates of Rs 41,417 crore. While blaming the increased revenue deficit on “exceptional times”, he emphasized the government’s commitment to fiscal rectitude and consolidation in the coming years, as indicated in the white paper.
The urban poor will get an employment guarantee scheme, though the details have not been spelled out. The Budget promises drinking water to 1.2 crore households and to make the state becomes accident free in 10 years.
The overall revenue expenditure is expected to be a little over Rs 2.61 lakh crore in the revised Budget estimates, while the total revenue receipt estimates have seen a downward revision to Rs 2.02 lakh crore in the revised budget estimates as against Rs 2.19 lakh crore in the interim Budget.