White Paper on State govt.’s finances is being finalised

Final touches are being given to the White Paper on the finances of the Tamil Nadu government. “The document will probably be ready in a few days,” a senior official said.

When he assumed office last month, Chief Minister C. Joseph Vijay announced that his government would release a White Paper. He claimed that the previous DMK government left behind an “empty treasury”. In fact, on Saturday, Finance Minister N. Marie Wilson said in Nagapattinam that it would take two weeks to complete the document.

Now the government plans to present the White Paper in the Parliament, just like the AIADMK government did in August 2001. The then Finance Minister C. Ponnaiyan had presented the White Paper as part of his 2001-02 Budget speech. However, 20 years later, before presenting the Budget in Parliament, the DMK government released a similar document at a press conference by the then Finance Minister Palanivel Thiaga Rajan.

Given the government’s tight financial situation, many of TVK’s election promises will likely remain only on paper.

According to a conservative estimate, full fulfillment of nearly a dozen promises, including an increase in monthly benefit for women from ₹1,000 to ₹2,500, free bus travel for women across the state, six free refills of cooking gas cylinders, a sovereign gold coin for eligible women at the time of marriage, gold rings for children born in government hospitals, would require more than Rs 1 lakh crore annually. Old-age pension of ₹3,000 and grant of ₹15,000 per annum to parents or guardians of school-going children (up to Class 12).

The government has only implemented watered-down versions of its promises of 200 units of free electricity every month for the domestic category and a complete waiver of crop loans received by small and marginal farmers from cooperatives and a 50% exemption for large farmers.

Although free electricity for domestic consumers has not caused any negative reaction, the decision to waive crop loans has been criticized by different parties, including allies of the ruling TVK and farmers’ organisations.

The government is yet to announce how it will implement the increase in monthly benefit for women as the annual burden would be around 39,000 crore even if it chooses to meet the current strength of only 1.3 crore beneficiaries.

While agriculturists are unhappy with the crop loan waiver, an agriculturist suggests that the government should combine the annual support scheme for farmers with Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), where ₹6,000 is paid annually to each beneficiary, by promising ₹15,000 per year to each farmer. Currently, around 22 lakh farmers are covered under PM-KISAN in the State. If the State provides support of ₹ 9,000 per year for each farmer, it will spend only around ₹ 1,980 crore annually. Otherwise, it will be ₹3,300 crore.

Several developments need to occur before the White Paper is published. The State Cabinet has not met formally even once. The date when Governor Rajendra Vishwanath Arlekar will address the Assembly is to be determined.

In Tamil Nadu, as there is no tradition of the Cabinet giving approval for the address or the Budget, the Cabinet is informed about the general outlines of the Governor’s speech and the State Budget. Last week, Mr. Arlekar, who is also the Governor of Kerala, made his speech in the Kerala Assembly. The state government has not decided on the Governor’s address as it is waiting for the Center to appoint a full-fledged Governor.