Rejecting the allegation that the State was plunging into mounting debt, Finance Minister K. Anbazhagan on Friday told the Assembly that there was nothing wrong in going for loans to implement projects and welfare measures.
In his reply to the debate on budget, Mr. Anbazhagan pointed out that postponing projects was not advisable as the project cost would escalate. “The total debt liability of Tamil Nadu is Rs 89,149 crore and the per capita debt is worked out to be Rs. 14,353,” he added saying that the figure was lower when compared to Maharashtra, Karnataka, Andhra Pradesh and Kerala.
Explaining that borrowing was not at all an issue, the Finance Minister said what was more important was whether the government had the capacity to repay the loans.
Mr. Anbazhagan said many States including Tamil Nadu, West Bengal and Maharashtra witnessed a revenue deficit because of the global economic recession. Tamil Nadu's revenue deficit stood at Rs. 5,020 crore, much higher than the estimated Rs 1,024 crore. In the case of Maharashtra, the figure increased to Rs. 12,730 crore, while it was Rs. 23,054 crore for West Bengal.
Citing the arguments of economists that the government should not artificially reduce its expenditure in the face of economic slowdown, he said, on the other hand, the government should increase its spending.
The Minister also attributed the downward trend in the economic growth to the world-wide recession in the economy and floods in the State. The growth was 11.29 per cent in 2006-07, but came down to 4.4 per cent in 2007-08 and 4.55 per cent in 2008-09. “Since the situation is improving, the growth has reached 5.53 per cent in 2009-10,” he added.
As regards AIADMK member D. Jayakumar's charge that Tamil Nadu's share from Central revenue had been dipping, the Minister said the estimated shortfall would be only Rs. 5,000 crore in the 13th Finance Commission period (2010-2015). He, however, explained that Rs 4,000 crore specific grants would bring down the shortfall to Rs. 1,000 crore.
Mr. Anbazhagan rejected the AIADMK allegation that the government had created a trust for restoration of Chennai rivers only to avoid taking responsibility for any failures.
