The DMK government in Tamil Nadu on Monday released a White Paper on the state’s finances and highlighted the fiscal imbalance and mounting debt created by the “mismanagement by the previous AIADMK government”.
Finance minister PTR Palanivel Thiaga Rajan blamed the previous AIADMK government’s “lack of political will and administrative skill” for the heavy debt burden and lowering State’s Own Tax Revenue even as GST dues to Tamil Nadu were on an uptrend. He further said the decline in finances presents DMK a rare opportunity to initiate “once-in-a-generation” reforms to bring the state back on the growth path.
According to the White Paper, the state’s debt burden stood at Rs 5.70 lakh crore, while debt per citizen was at Rs 1.10 lakh. Tamil Nadu’s revenue deficit as a percentage of the state fiscal deficit has been showing a steady increase, thereby making the utilisation of fresh funds towards current expenditure instead of capital expenditure.
Tamil Nadu’s beleaguered state-owned units such as the power utility TNEB and public transport corporation have been mounting debt year-on-year. For example, the state loses Rs 59.15 for every kilometre covered by a state bus, while for every unit of power delivered, the state loses Rs 2.36, meaning the more power is generated and delivered, the more is the loss.
The finance minister contrasted the situation with that from the 2012-13 numbers, when there was a revenue surplus of Rs 1,760 crore. Through fiscal 2019-20, the deficit had risen to Rs 35,909 crore.
Thiaga Rajan said the situation, although perilous, cannot be termed irredeemable. He said the DMK government can turn around the situation before the end of the current tenure.