AIADMK Govt Bets Again On Flagship Welfare Schemes, Presents Populist Budget
The All India Anna Dravida Munnetra Kazhagam government in Tamil Nadu presented a populist budget, the last full- fledged exercise in its present regime ahead of the Assembly elections next year with a Rs 59,346 crore fiscal deficit and is set to borrow Rs 59,209 crore.
The outstanding debt will be Rs 4,56,660.99 crore constituting 21.83 percent of Gross State Domestic Product in 2020-21.
The K Palaniswami-led government, which has been implementing a slew of welfare schemes announced a special purpose vehicle to finance and manage the popular state-run, low cost food chain 'Amma Unavagam' and made a provision of Rs 100 crore for the purpose.
The government which provides free rice for ration card holders provided Rs 6,500 crore for food subsidy. Supply of toor dal and edible oil at subsidised rates will be continued in 2020-21 as well.
While agriculture saw an allocation of Rs 11,894.48 crore, fisheries got Rs 1,229.85 crore. As many as 7.41 lakh acres will be covered under micro irrigation with an enhanced outlay of Rs 1,844.97 crore.
A total crop loan of Rs 11,000 crore will be disbursed by cooperative institutions and a provision of Rs 200 crore has been made to provide full interest waiver for prompt repayment of loans.
Deputy Chief Minister O Panneerselvam, who holds the finance portfolio presented the budget and this is the 10th time he is tabling the annual financial statement.
His budget address stretched to about three hours and 15 minutes and is seen as among the lengthiest in Tamil Nadu. It was peppered with references to late Chief Minister J Jayalalithaa's name and her initiatives. Leader of Opposition MK Stalin sat through the address.
Despite the many fiscal constraints, Tamil Nadu remains steadfast in adhering to fiscal discipline and has maintained key fiscal ratios including the fiscal deficit and the debt to GSDP ratio within the prescribed normsDeputy Chief Minister O Panneerselvam
On flagship welfare initiatives like free distribution of milch cows, goats and sheep, the Minister said in 2018-19 the livestock sector accounted for 5.83 percent of the State Gross Value Added and the fisheries sector for a further 0.47 percent.
In 2016-17, the livestock sector surpassed the share of the agriculture sector in Gross State Value Added at constant prices and has maintained the position in 2017-18 and 2018-19.
“This reflects the success of the flagship initiatives launched by late Chief Minister Puratchi Thalaivi J Jayalalithaa for the free distribution of milch animals and the fodder development programme. This also demonstrates that growing incomes are causing changes in food preferences to protein rich foods like milk, milk products eggs and meat.” he added.
The government allocated Rs 4,315.21 crore for social security pension covering 1.73 lakh new beneficiaries and Rs 250 crore for accident-cum-life insurance scheme for Below Poverty Line families.
To finance the fiscal deficit, the government plans to raise Rs 59,209.30 crore as net debt against the overall permissible borrowing limit of Rs 62,757.80 crore, Panneerselvam said in his budget address.
While revenue deficit stood at Rs 21,617.64 crore, the revenue expenditure has been projected at Rs 2,40,992.78 crore.
Significantly, the government set apart Rs 4,265.56 crore to help State-run electricity generation and distribution behemoth The Tamil Nadu Generation and Distribution Corporation Limited overcome losses and allocated Rs 20,115.58 crore for the energy sector.
"The government is committed to funding 50 per cent of the losses incurred by TANGEDCO in the previous year and in the budget estimates 2020-21, Rs 4,265.56 crore has been provided for this purpose," the Minister said.
Noting that Tamil Nadu has ‘withstood fierce economic headwinds’ seen at the global and national level, he said in 2019-20 growth is projected to be 7.27 percent, higher than the projected all India growth rate of 5 percent.
He also said, “We expect an even stronger growth performance in 2020-21."