TN Budget: Some Poll Promises Fulfilled But No Revenue Generation

The Dravida Munnetra Kazhagam (DMK) government of Tamil Nadu presented its maiden Budget for 2021-22 on Friday. The erstwhile All India Anna Dravida Munnetra Kazhagam (AIADMK) government had presented an interim Budget in February.

The government refrained from levying new taxes, belying expectations of generating revenue following the release of the white paper on the financial earlier this week.

The government fulfilled part of its poll promises by slashing the state excise duty on petrol by Rs 3, waiving loans to the tune of Rs 2,756 crore availed by women self-help groups (SHGs), and increasing the allocation for school education, the police and Tamil welfare.

Finance minister PTR Palani Vel Thiagaraja also announced a slew of schemes on urban employment, rural housing and drinking water. The maternity leave for government employees has been increased from 9 to 12 months.

The main opposition party, AIADMK, walked out of the house soon after Thiagaraja started addressing the Assembly.

Revenue deficit needs attention

The finance minister also informed that the revenue deficit for the year 2021-22 would be at Rs 58.692.88 crore. His predecessor O Panneerselvam, while presenting the interim Budget, had blamed the Centre for the fall in revenue.

Professor Venkatesh Athreya reiterated the urgent need to generate revenues. “The state government must demand its share of the revenue from the Centre. But it should also concentrate on making state public sectors profitable, like Kerala, to generate revenue,” he told Newsclick.

Referring to the people-centric measures in the Budget, Athreya said, “The government has stuck to its poll promises and welfare measures. But we have to see how long they can sustain without revenue generation.” 

Anti-Centre sentiments

The reduction in the excise duty on petrol captured the sentiments against the Narendra Modi government over the spike in petrol and diesel prices. The minister also accused the

Union government of delay in allocating the state’s revenue share. “The tax on petrol has increased to Rs 32.90 from Rs 10.39 in 2014 and on diesel to Rs 31.80 from Rs 3.57 in 2014,” he informed the House.

Senthil Arumugam, general secretary of the Makkal Neethi Maiam, told Newsclick, “The state government has also not allocated funds to local bodies. It is high time that we empower local bodies so that people are ensured of basic amenities.” 

The timing of the pro-fisheries Budget allocation cannot be overlooked given that the strong wave of protests against the Centre’s Fisheries Bill. The Finance Minister allocated Rs 433.97 crores for establishing fishing harbours and fish-landing centres and Rs 1149.79 crore for the fisheries department.

Pro-Tamil measures

Being a state with strong linguistic sentiments, the minister announced that efforts will be taken to make Tamil the administrative language in all departments. To ensure better digitisation, all the Assembly documents and files will be digitised as part of marking the 100th year of the Tamil Nadu Assembly.

An award named after late chief minister M Karunanidhi, ‘Kalaignar Karunanidhi Semmozhi Tamizh’, will be revived and presented annually on his birthday with a cash prize of Rs 10 lakh.

The Budget has also set aside Rs 32,599 crore for schools and Rs 5,369.09 crore for higher education. A high-level committee will be formed to frame a new education policy for the state.

On the increased allocation for education, PB Prince Gajendra Babu, general secretary of State Platform for Common School System, said, “The increase in allocation for education was necessary. The government’s announcement of working on a unique curriculum should also be welcomed”.  

MSMEs call for urgent attention

Though Thiagaraja announced the formation of a committee to study the financial and infrastructural problems faced by MSMEs and a credit guarantee scheme, KE Raghunathan, convenor of Consortium of Indian Associations (CIA), said, “The ailing MSME sector expected more announcements since we had mentioned our problems to the government.”

The CIA has been highlighting their demand for loans with 6 months’ EMI without interest. “The recovery of the entrepreneurs not covered by the Centre’s stimulus packages will be delayed.” The organisation also suggested appointing fresh graduates as apprentices to overcome the shortage of skilled workers. “Fresh graduates can gain employability skills while MSMEs can address the shortage of workers,” Raghunathan said.