Published Date: August 9, 2021
Ahead of the Tamil Nadu budget, scheduled to be announced on 13 August, state Finance Minister Palanivel Thiaga Rajan — or PTR as he is more commonly known — told ThePrint in an exclusive interview at the party headquarters Wednesday that it has been discussed in multiple state cabinet meetings that outcomes of all policy decisions must be attributed to the political leadership.
“We are a democracy, we are not a run-by-IAS country. We are run by elected officials who the people chose,” he said.
PTR said that when outcomes are good the political leadership must be credited and when they are bad, the leadership must take accountability and bear the cost of it. The minister added that the upcoming budget and style of governance that can be expected in Tamil Nadu under the current Dravida Munnetra Kazhagam (DMK) government will be very different from that during the previous All India Anna Dravida Munnetra Kazhagam (AIADMK) government.
“We will be very hands-on and get back to the mechanics of administration to efficiently govern such a large state,” he said.
The DMK government, headed by M.K. Stalin, came to power in the state in May after a gap of 10 years.
Coming to power after such a long absence, the DMK government is leaving no stone unturned to create a good impression on the people, and the creation of an Economic Advisory Council, announced in June, was one such measure undertaken by it.
With esteemed panelists such as Nobel laureate Professor Esther Duflo, former RBI Governor Raghuram Rajan, former chief economic advisor to the union government Arvind Subramanian, development economist Prof. Jean Dreze and former Union finance secretary S. Narayan, the formation of the EAC was well-received.
PTR was quick to explain that this was not a formal arrangement. Based on Duflo’s suggestion, the Council has adopted a more informal way of functioning. The main focus he said, which is intrinsic to the principles of the Dravidian Movement, is inclusive economic growth.
“We want the right kind of growth, not the kind which separates billionaires from poor people,” said Thiaga Rajan.
While the Council formally convenes rarely, the state finance minister speaks to at least one or two members every week for an hour each.
The soon-to-be-released budget will reflect the changed priorities in the style of governance, said Thiaga Rajan. And despite “the state of finances left by the previous (AIADMK) government” and the impact of Covid on the economy, he said it will be a vision document that will highlight the philosophy, approach, and execution of the current government.
It will also be different from the Union budget of the “past five-six years”, he said, which according to him, “have been irrelevant”.
Four days before the budget, Tamil Nadu will also release a white paper on the state of finances, that has been prepared by PTR and some members of the EAC. Explaining the need for the document, the minister said that CM Stalin wanted to ensure a transparent government that worked along with the people and kept them informed, “unlike the previous government”.
‘Union budget divorced from actual policy decisions’
Speaking about the upcoming state budget, Thiaga Rajan said he wanted to ensure that it was not like the union budget, which according to him was divorced from the actual policy decisions announced by the central government.
“Budgets of the Union government for the past five-six years have been irrelevant because what they say in budgets, compared to decisions they make which affect people’s lives, are divorced from each other,” he said.
The state minister used the Centre’s implementation of demonetisation, its decision to call a national Covid lockdown, the rollback of the corporate tax, and implementation of the goods and services tax (GST), as examples.
“We don’t want to be like that. We want to use the budget to weave our economic philosophy, political values, and actionable steps all together,” he said.
Thiaga Rajan, who is known to be frank about his opinions, in his maiden speech as finance minister on 28 May had said that the GST Council — its formation was approved in 2016 — was becoming a rubber stamp authority.
He explained that in the two GST council meetings he has attended, he had still not got clarity on which decisions must be made actively by the Council, which would be made by others, which would be ratified by the Council and then which would be informed to it.
“If the council is that important and didn’t meet for eight months, how are these two statements compatible with each other?”
Talking about the Rs 75,000 crore compensation given by the Centre to the states in July, to make up for the shortfall in their revenues because of the implementation of GST, Thiaga Rajan explained that it was a “mechanical” number which meant nothing.
The Tamil Nadu finance minister also said that finance ministers of other states (such as Kerala, Punjab and Chhattisgarh) had highlighted that the calculation of the revenue dues was incorrect.
‘Long-term impact of Covid immense’
Talking about the impact of Covid on the economy, Thiaga Rajan told ThePrint that during the second Covid wave, the EAC gave valuable inputs to the government that included focussing on senior citizens, mental health, and risk assessment for a potential third wave.
One such pilot project that was conducted based on their inputs was in Madurai, he said, where an overlay map of antibody penetration, vaccine penetration, and the demographic mapping of vulnerable population in the district was done, to figure out the highest risks and to take counter-measures.
As the new government prepares to table the budget, it is also preparing for a potential Covid third wave.
Explaining the long-term social and economic costs of Covid, Thiaga Rajan said that child marriages had increased and maternal mortality rates had gone up in the state, which he said, was unacceptable. Many small businesses had shut down, with no hope of revival; child labour had gone up and the number of school dropouts increased, he said.
Careful to not paint a picture of doom, however, he explained that the plan for this budget — which he referred to as an “amended” budget (revised from the interim budget presented by the AIADMK before the elections) — and the main one in February 2022 would be to plan for financial needs for corrective action.
“At the end of the day, we are a very rich state. We have a uniquely high per capita income, plus good social development indicators.”
Source: The Print
