Wednesday, Mar 12, 2003
Wednesday, Mar 12, 2003 |
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Tamil Nadu
By Our Special Correspondent
Presentations by leading representatives at a seminar on `Financial status, reforms and revenue mobilisation in Tamil Nadu', organised here yesterday by the party as part of what its founder, S.Ramadoss, and the party president, G.K.Mani, MLA, described as a pioneering exercise in preparing a shadow budget and involving parties in a serious dialogue on economic issues, were supplemented by views expressed by speakers representing chambers of commerce, economists, a journalist, consultants and entrepreneurs, including a few from Andhra Pradesh and Karnataka. The main speaker on the PMK perspective, based on the party's `Draft budget 2003-04' released here recently, M. Ramadoss, cited research studies to show that while the fiscal situation of all States had deteriorated since 1991, Tamil Nadu was among the few States which "maintained its resource mobilisation" at 8-10 per cent of the State's gross domestic product in the 1990s.
Centre blamed
Prof.Ramadoss said the State Government's claim that the treasury was emptied by the previous regime was hardly borne out by an increase in the State's revenue mobilisation by nearly three times in ten years. The deterioration in States' finances was largely due to a worsening of the Centre's financial position and its failure to effect resource transfers to States as per a formula recommended by the Finance Commission. However, with the Union Finance Minister, Jaswant Singh's liberal attitude in the budget for 2003-04, Tamil Nadu was likely to "overcome the crisis" and "reach a comfortable position" by way of compensation from the Centre for loss against implementation of value-added tax and reduction in the ceiling on Central sales tax and grant of power for States to levy tax on textiles, tobacco and cigarettes, besides taxing on services. Hence efforts should be made to achieve a healthy financial position on a permanent basis by augmenting non-tax revenue. The party founder, S.Ramadoss, said, in his concluding remarks, it was only during the Vajpayee regime that actual progress was made in the infrastructure, especially roads, sector. The veteran parliamentarian, Era Chezhian, said it was not the level of fiscal deficit, which was important, but how productively the borrowed money was spent. Only joint efforts by the Centre and States as "partners with equal sovereignty" would help in overcoming the "vicious circle" of high levels of government deficits and borrowings. Suggestions made by other speakers included establishment of a State-level technology transfer centre for small-scale industries, export promotion cells for all districts, publication of the draft law on VAT well before its implementation, grant of sops for the Chennai port, especially by Concor, to help it regain its financial health undermined by the commissioning of the Ennore port, reduction in stamp duty to garner revenue and curb black money and concentration of the farm sector's efforts on crops suitable for Tamil Nadu's water-starved conditions.
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