BPL insurance cover is a Tamil Nadu vote catcher

Despite the 17.64% fall in revenue and an ever-widening fiscal deficit, he was optimistic of a 2.02% positive growth rate in 2020-21.

Published: 26th February 2021 07:35 AM  |   Last Updated: 26th February 2021 04:32 PM   |  A+A-

Chief Minister Edappadi K Palaniswami and Deputy Chief Minister O Panneerselvam arrive at the Assembly to present the Budget in Chennai. (Photo | P Jawahar, EPS)

Chief Minister Edappadi K Palaniswami and Deputy Chief Minister O Panneerselvam arrive at the Assembly to present the Budget in Chennai. (Photo | P Jawahar, EPS)

For Tamil Nadu Deputy CM O Panneerselvam, presenting the poll-year Interim Budget was a tough call, having to balance the pandemic-struck economy and drained coffers on the one side and the people’s mandate on the other. Despite the 17.64% fall in revenue and an ever-widening fiscal deficit, he was optimistic of a 2.02% positive growth rate in 2020-21.

He contrasted it with the 7.7% negative growth rate in the rest of the country, saying the state managed to buck this trend due to the government’s “sustainable policy decisions”. But the masterstroke that could draw votes was the announcement of insurance cover of Rs 2 lakh for families living below the poverty line in case of natural death of the breadwinner and Rs 4 lakh for accident deaths. 

The much-awaited booster shot of Rs 19,420 crore for the health sector was only a 22% rise from last year’s allocation, which came as a disappointment, considering the pandemic. But he seemed to have stitched up the gap a little, by the Rs 144-crore rejuvenation package for the newly-launched Amma clinics that provide essential healthcare services to the underprivileged.

He justified the “unavoidable” large borrowings that has resulted in a spiraling fiscal deficit, citing a spike in expenditure to protect people’s welfare amid the climate of a sharp revenue drop. In this context, he requested the Centre to merge cesses and surcharges with the basic rate of tax to help states get, what he termed, “their legitimate share of the revenue”.

With the state’s own tax revenue having collapsed in the first four months of the current financial year and the collection of state GST and VAT starting to pick up from August last year, it may have been a valid plea.  Though the Budget may have seemed more of an announcement of the balance sheet with a few sops, the government could have trained its eyes more on two ailing sectors, health and agriculture. The two back-to-back cyclones and unseasonal rains wreaked havoc on crops, hurting productivity and the supply chain. The onus would be on the farmer friendly Chief Minister Edappadi K Palaniswamy to make it a more robust system if he retains power.

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