Chief Minister V. Narayanasamy on Tuesday said his government has evolved short-term and long-term plans to overcome financial constraints.
Talking to The Hindu , the Chief Minister conceded that the beginning of next year would be financially stressful due to commitments on repayment of principal amount borrowed from the open market through the Reserve Bank of India in 2007.
However, he ruled out any room for financial emergency as construed by political opponents. The financial difficulty faced by the government would not impact salary payment and implementation of ongoing schemes, he said.
The financial constraints and debt burden of the Union Territory were not an isolated case. The Tamil Nadu government had a debt burden of ₹2.5 lakh crore, Uttar Pradesh around ₹3.5 lakh crore and Karnataka ₹1.5 lakh crore.
“Almost all the State governments owe the Union government a huge sum. These governments have availed themselves of overdraft facility from the Centre. I am not trying to justify the debt burden. All I am saying is that there is no need for panic,” he added.
Blames previous regime
Mr. Narayanasamy said his government had inherited the legacy of mismanagement of the finances of the Union Territory by the previous N.R. Congress government. The previous government had overlooked all rules in diverting funds and appointed staff in the Public Works Department, Government Medical Colleges and all Public Sector Undertakings.
Just before the Assembly elections, around 2,500 employees were removed following a direction from the Election Commission.
The Chief Minister said his government had to clear the accumulated bills of the PWD and arrears of old age pension. The immediate task was to get from the Centre at least ₹500 crore of the total ₹1,250 crore non-Plan gap grant. The Centre had also promised to provide ₹550 crore as compensation for paying Seventh Pay Commission arrears.
Mr. Narayanasamy said he had taken up the matter with Union Finance Minister Arun Jaitley on several occasions. “He was very positive. I will be meeting Mr. Jaitley very soon,” he said.
The long-term plan was to bring financial prudence and mobilise internal resources. The government was examining various options, Mr. Narayanasamy said.
The government was waiting for a report from the committee headed by former Chief Secretary Vijayan to revamp government-owned corporations. Several of them were running at a loss and some of them had become defunct, he said.The government had been providing a budgetary support of around ₹500 crore annually. “The government will not hesitate to take bold decisions to revive the financial position,” he added.
