Good financial administration aims at making funds available for activities and to ensure the lawful and efficient use of the funds. The Budget is the preparation of the estimates of revenue and expenditure for an ensuing financial year.
The Tamilnadu Budget 2022-2023 was presented at 10 a.m. on the 18th of march of 2022 in the Legislative Assembly hall at Fort St.George at Chennai by Tamilnadu Finance Minister, Palanivel Thiaga Rajan. The Tamilnadu budget 2022-2023 is an e-budget.
It is necessary to understand the background for the Budget preparation. Tamilnadu has been a welfare state for years. In other words, the successive governments of Tamilnadu have been serious about the aspect of enhancing human welfare through populist measures like providing free grains/low priced grains under the Public Distribution scheme and other freebies like TV, Grinder, Mixie, Fan etc in addition to subsidies like free electricity for farmers. This naturally implies that the FiscalDeficit is going to keep growing.The Tamilnadu state’s revenue deficit has been steady increasing over the years. The revised revenue deficit was Rs.58,692.68 crores in 2021-22. Revenue expenditure has been growing over tax revenue receipts. In 2013-2014, the revenue deficit was -0.18% of GSDP (Gross State Domestic Product) and it rose to 1.44% in 2018-2019. The revenue deficit in Financial Year 2020-2021was Rs.61,320 crores, which is 3.16% of Gross State Domestic Product.
The expenditure under subsidies and transfers is on a perennially upward spiral in Tamilnadu. A large part of the expenditure also involves the payment of salaries and pension of Tamilnadu government employees. Tamilnadu spent an alarming 66% of its revenue on the payment of salaries, interest and pensions. This is 11% higher than the national average of 55% spent by other states. The fiscal position of Tamilnadu has been deteriorating leading to lower investments, development and growth. Tamilnadu had a revenue surplus between 2006 and 2013.Revenue deficit has become a recurring phenomenon. The revenue deficit was 4.1% in 2021-2022 and is estimated to be 3.8% in the financial year 2022-2023. DMK was in power between 2006 and 2011. AIADMK was in power between 2011 and 2021. Expenditure is increasing all the time. Capital expenditure is expected to be at 43,832.54 crores, which is 23.8% more than the revised estimate.
Fiscal deficit financed by other means for 2016-2021 was a staggering 12.68% of Total Fiscal Deficit, which was Rs.39,071 crores between 2016 and 2021. The fiscal deficit (difference between total revenue and total expenditure) is pegged at Rs.92,529.43 crores in the revised budget estimates for 2021-22, which excludes 8,095 crores received as back-to-back loans in lieu of GST compensation. The Fiscal Deficit of Tamilnadu was Rs.92,305 crores(4.43%) of Gross State Domestic Product for Financial Year 2020-2021.
This brings us to the topic of Public Debt. The outstanding debt of Public Sector Undertakings -TANGEDCO and TANTRANSCO(Power generation and power transmission) as well as the transport undertakings stands at a staggering 1, 99, 572.55 crore rupees
The Tamilnadu budget for 2022-23 has not offered any relief for the common man.There has been no announcement made for any subsidy to reduce the price of gas cylinder, petrol and diesel.
For the Girl Child, The DMK government has altered the Moovalur Ramamirtham Ammaiyar Memorial Marriage Assistance Scheme into a single educational assurance scheme, thus denying the girl children sovereign gold at their marriageable age.
As far as the Education Sector is concerned, although Rs.36, 895 crores have been allotted for the Department of School Education, 84% would go to wards’ salaries leaving a small sum for improving school infrastructure. The decision of the Tamilnadu government to allot Rs.250 crores to upgrade government colleges is a good move. The allocations are good as long as they reach those for whom they are meant for. School children of private unaided schools, which teach exclusively in Tamil are going to be given textbooks and notebooks at an estimated cost of Rs.15 crores. There are also special schemes like providing Rs.1000 crores for creating new classrooms, tabs and hostels.
We find that substantial amounts have been sanctioned for various schemes but the brilliance will be in the successful implementation of the schemes and in the audit of the schemes.
The DMK government openly supports atheism/ rational thinking and does not believe much in organised religion. The DMK is trying to please Hindus by allocating Rs.1000 crores for consecration and renovation of temples. The losses in temple land, temple jewellery, temple idols and now the never-ending demolition of temples are all forcing the DMK government to seek favour from the Hindus.
There are many glaring fallacies in the budget. Let us take the example of the allocation of Rs.500 crores to build 1000 houses for the members of the Irular community. It works out to half a crore rupees for every house. Would that be economical? Could the government not have allocated 10 lakhs per house and build 5000 houses! One must understand that the shortage of sand has led to an increase in house construction cost in Tamilnadu under the Pradhan Mantri Awaas Yojana by Rs.2 lakhs. The cost of construction of a simple house has thus increased to Rs.7 lakhs. Also, why does the DMK government have such profound bias towards the members of only Irular community?! Are other social and economically backward people not to be cared for? Or is it because of the way the Irular community has been portrayed in the propagandist movie, Jai Bhim, which seems to have helped the DMK government electorally? This is not to say that the Irular community has not been marginalised. However, it is unfair to the other marginalised communities that only the members of the Irular community get to have Rs.50 lakh houses paid for by the State government – courtesy the tax money collected from the people. One must understand that the movie, ‘Jai Bhim’ has not portrayed the real Irulars of the forests. Rather, the movie portrays the ‘Villiers’ of the plains. The plains’‘Villiers’ or the city Irulars live in low density areas like beaches, small dunes near water sources etc. They are environment friendly and kindly people like the forest Irulars. Some anthropologists claim the forest Irulars and plain Villiers are two different sub-groups. Other anthropologists claim that the Forest Irulars and the Plains’ Irulars are members of the same community and only that their place of habitation differs. Thus, the government has been unfair in allocating so much money for building houses for so few people and that too, the members of only one particular community.
Yet another foolish allocation is the Rs.300 crores for a Botanical Garden in Chennai. Chennai has beaches, a national park, a bird sanctuary and a zoological park. What is this intense need to set up a botanical garden in Chennai with a London Party? Does the government not have more pressing expenditures?
Step motherly treatment has been provided to the other big towns and cities in Tamilnadu state. There has been insufficient fund allocations for the infrastructure building of the other the other big towns/cities! Less efforts have been taken to develop 2nd tier cities.
The Agriculture Budget for 2022-23 has increased the allocation for agriculture and allied sectors to ₹33,007.68 crore. This is slightly higher than the ₹32,775.78 crore in the revised estimate for 2021-22. The government has promised to take steps to achieve 126 lakh Million Tonnes of food grain production in 2022-23.
The budget has allocated ₹ 132 crore for the Chief Minister’s Dry Land Development Mission. The scheme will cover an area of 7.5 lakh acres in 3,000 dryland clusters to support dryland farmers.
This budget has allocated ₹300 crore in 2022-23 for the ‘Kalaignarin All Village Integrated Agriculture Development Programme’. This was announced in the first agriculture budget. The Agriculture Minister of Tamilnadu, Mr. Panneerselvam said the main objective of the scheme is to bringing holistic development to all village panchayats. The project has been designed to be implemented in village panchayats identified under the Anaithu Grama Anna Marumalarchi Thittam every year, which is being implemented by the Department of Rural Development & Panchayat Raj. During the first year, this project is being implemented in 1,997 village panchayats of Anaithu Grama Anna Marumalarchi Thittam, as these two projects are converged and implemented parallelly, the Minister said.
According to Tamilnadu Agriculture Minister – ‘All the subsidies, welfare schemes, infrastructure, agricultural technology and training programmes of the Department of Agriculture will be converged and implemented effectively in close coordination with the Department of Rural Development & Panchayat Raj.’ The first year’s allocation will cover 3,204 village panchayats converged with Anaithu Grama Anna Marumalarchi Thittam(reference -budget speech).
While the above move to integrate is commendable, the problem may lie with how the schemes will be amalgamated and implemented.
Tamilnadu has 12,618 Village Panchayats, 385 Panchayat Unions (co-terminous with Blocks) and 29 District Panchayats. While it can be safely assumed that the DMK government is having good intentions with respect to its intentions in agriculture, the problem is with respect to the implementation.
The Tamilnadu Agricultural Budget has allocated Rs 2,399 crores as the state’s share of premium subsidy for the Crop Insurance Scheme.This is a good move. However, the allocation of Rs.5157.56 crores for the provision of free electricity to farmers may not be a good move. How long are we going to subsidise electricity for farmers using tax payers’ money? Would it not be better to incentivise farming with better irrigation, organic farming and improvement of the natural soil of the agricultural land? Should we not work towards sustainable development?
There are not many steps taken towards the protection of the environment.
It is quite funny to notice that the DMK which did not support the Farm Laws and instead fostered farmers’ stirs and protests(often leading from the front!) has not brought Minimum Support Price for additional crops other than the crops already listed by the Central Government. Agriculture is a concurrent subject.
Next, with respect to Employment generation, we find that there are not many and sufficient schemes for employment generation.PM Housing scheme gets Rs 3700 crores, Rs 911 crores allocated for Medium and Small-Scale Enterprises (MSMEs). The Rs. 4130 crores allotted for disbursing loans to the Self-Helpgroups must be properly and honestly disbursed to those deserving.
Rs.3000 crores have been allocated for the Jal Jeevan Scheme as the State Share for the expenses involved in the waterproject. However, we must try to understand if the government is doing enough to protect water. The highest encroachments have been reported from Tamilnadu as per the 1st census of water bodies. The number of encroachments of water bodies is 8,366 in Tamilnadu. This high number of encroachments of water bodies does not augur well for Tamilnadu. What steps are being taken by the Tamilnadu government to handle this crisis? Does the government wish to protect the water bodies or not?
It is appreciable to note that the Nilgiri Tahr, the state animal of Tamilnadu is being protected at the outlay of Rs.10 crores.
Also, there are certain odd and shocking aspects to the budget like committing that a collection of E.V.Ramasamy’s books will be published in print and digital editions at a cost of Rs.5 crore rupees. Is this expense really warranted? Is E.V.Ramasamy really such a great personality or is the DMK trying to build a cult status around E.V.R? Why are we building a cult status for KANNADIGA in TAMILNADU.E.V.Ramasamy was a Kannadiga. Erode Venkatappa Ramasamy was born on 17 September 1879 to a Kannada Balija merchant family in Erode.
Similarly, there is a staggering allocation like Rs 705 crore allocated for MLA local area development fund.
We also notice a large number of schemes like Naan Mudhalvan modelled after the Central Government Schemes.
In an interview to the New Indian Express, Mr.Palanivel Thiaga Rajan had himself openly accepted that the Tamilnadu Government is not getting the revenue that they are supposed to get from commercial taxes, mining, liquor/excise among others. He admits that the TN government is losing 1000’s of crore rupees revenue with leakages running up to 2.3% of our GSDP. ‘The leakage is up to 50% in the liquor sector (TASMAC). In Commercial taxes, it is up to 40% to 50%. How is the government going to do it?
Thiru. Palanivel Thiaga Rajan has given multiple excuses for the non-performance of the state government in the field of reforms in the state economy giving the excuses of inflation, the Corona Virus and now the Russia -Ukraine war for the lower economic growth in Tamilnadu. It is not good to give excuses at that superior position of Ministership. While unaccomplished people have a tendency of giving excuses, people holding eminent positions in society are expected to display greater stature and maturity while issuing statements and giving interviews. One must desist from the tendency of blaming world events for everything. Viruses and world wars are not within our control but local situations are quite within our control.
There are also ambiguous allocations like Rs.50 crores allotted for emerging sector seed funds in the state budget. Another 30 crore rupees has been allotted for promoting start-ups in Tamilnadu.
Let us move on to the topic of Health. Rs.1019 crores have been allotted for improving the quality of government hospitals.Big budgetary allocations must be matched by brilliant implementation, accounting and audit.
There are a few good things to the budget like the way the government of Tamilnadu has taken up the issue of mental health, seriously. The Institute of Medical health, Kilpauk is going to be upgraded into the Tamilnadu Institute of Mental Health and Sciences. It is the ripe time to have a premier health institute for mental health in Tamilnadu like the National Institute of Mental Health and Neuro Sciences in Karnataka.
The other good thing the budget has its allocation for the girl child going to school.Rs.1000 is proposed to be paid directly into the bank accounts of the girl students who studied from 7th class to 12th class in government schools till the uninterrupted completion of their Undergraduation degrees, diplomas and ITI courses. This step is expected to benefit 5 lakh girl students. The FinanceMinister talks about the Social safety net, data driven governance, environmental stability and inter-generational equity. How far will they be implemented?
The alarming features in the Budget include Special Social Media monitoring cells to be set up within police department. Is the state government planning to have a tab on all social media? If the idea is to chase online criminal dealings including online anti-national activities, it is very good but one might consider questioning the intentions of the state government. Does it want to keep a tab on the various right- wing ideologues, who differ from their ‘Dravidian ideology’ inspired by the Kannadiga, E.V.Ramasamy.
There are many allocations like the allocation for the fire department(Rs.496.5 crores) and 500 crore rupees for the flood mitigation projects as well as Rs 10,285 crore to the Tamil Nadu police department, which seem unclear.
In the field of transport, the state has requested for 2000 electric buses. The State government has said that the commuter percentage has gone up by 60 %. A staggering Rs 1,520 crore has been allocated for free bus travel for women.
There are also new museums, which are going to be built. The Government plans on remodelling the Children’s Nature Park.
Tamilnadu has requested the centre to extend GST compensation by 2 years. The Tamilnadu government seeks extension till 2024.
On the whole, the Tamilnadu Budget 2022-2023 is very disappointing! The Tamilnadu government is dependent on borrowings and the debt on the common man has increased. There are neither signs of deliverance for any one nor any profound vision in the budget. Tamilnadu has become a big borrower with public debt of Rs.2.63 lakhs per family. The investments that Tamilnadu is able to attract is only a fraction of what its neighbour, Karnataka is able to attract. This was because Tamilnadu had turned into a hub of protests thanks to DMK, which was in opposition before 2021. Tamilnadu is a land of ancient culture, beaches, forests, hills and intelligent people. Yet, Tamilnadu has not grown economically the way it should have. Thus, the Tamilnadu Budget 2022-2023 is a reflection of the failed Dravidian Ideological Framework.
by Dr.S. Padmapriya
Email: writerpriya@gmail.com