With a total borrowing of Rs 86,000 crore, Tamil Nadu government is likely to end this financial year, even though the Centre has allowed the state to borrow up to Rs 92,000 crore. Moreover, the state government has decided to provide bonus to employees of public sector undertakings.
As per the budget presented in February, Edappadi K Palaniswami-led Tamil Nadu government was supposed to borrow around Rs 46,000 crore, but due to the coronavirus-induced lockdown from March 25 onwards, the state government had to borrow almost double the time as the expenditure for combatting the spread of Covid-19 and treating virus-infected patients.
“With the relief being announced by the state government, the tax revenue has started increasing. GST as well as revenue from fuel and liquor is almost normal as it used to be before the outbreak of Covid-19. Revenue from a few other sections of the economy is yet to increase and we are hoping even that will start increasing the coming months,” said a senior financial department official.
In the recent GST Council meeting, Tamil Nadu government as well as other state governments had agreed to borrow under option 1. “We took the decision to go for the option 1 as we came to know that we will be left with more funds as the compensation for this financial year will be paid by the Centre in the future years but we are allowed to borrow a little more than Rs 9000 crore,” said the official.
With Diwali around the corner, employees of the undertakings owned by the state government are expecting the government to declare bonus. “Employees of all those public sector undertakings which are earning profits will get normal bonus. For other undertakings, government will provide support and bonus will be released as it will increase the spending in the economy,” the official said.