In a major announcement, Tamil Nadu’s DMK government on Friday announced a cut in the effective rate of tax on petrol by ₹3 a litre, effective midnight of August 13.
Finance Minister Palanivel Thiaga Rajan made the announcement while presenting the revised budget for 2021-22 on the floor of the Assembly here. The decision will result in a loss of revenue of ₹1,160 crore a year to the State exchequer.
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“Tamil Nadu has 2.63 crore two-wheelers. This has become the most popular mode of transport for the working poor. They keenly feel the pinch of the rising cost of petrol. The Chief Minister [M.K. Stalin] keenly feels the pain of the working poor and the middle class,” Mr. Rajan said in his maiden budget speech and hoped that the cut would provide a major relief to the toiling working-class people in the State.
Contending that the Union government was solely responsible for the increase in the cost of the fuel, Mr. Rajan underlined: “Nowhere is this dilution of the spirit of federalism more apparent than in the taxation of petrol and diesel at the pump. The overall Union levies on petrol were increased from ₹10.39 per litre in May 2014 to ₹32.90 per litre today.”
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The State government also announced a waiver of loans to the tune of ₹2,756 crore due from self-help groups to the co-operative credit societies. “The government will work out a suitable mechanism to infuse equity into the cooperative credit structure in stages to ensure that the lending capacity of the co-operatives is not affected,” the Finance Minister said.
As for an important scheme relating to the payment of ₹1,000 every month to women heads of households, Mr. Rajan said: “To ensure that the payment of basic entitlement income is targeted to the genuinely poor, the government in consultation with experts is formulating guidelines on the objective criteria by which the eligible households will be identified for this scheme.”
The scheme was intended for the “genuinely poor”, he said and pointed to the criticism and litigation that such a universal payment should not be made to the well off and the salaried. The intention of the government is to provide this assistance to ‘home makers’, he said and added there was no need to change the name of the head of the household in ration cards on this account.
In another announcement to implement a commitment made in its election manifesto, the DMK government enhanced the period of maternity leave from nine months to 12 months for women government employees with less than two surviving children with effect from July 1, 2021. “The lumpsum grant from the Family Security Fund paid to the family of a government employee who dies while in service will be enhanced from ₹3 lakh to ₹5 lakh,” the Minister announced.
With the Minister's announcement that the enhanced Dearness Allowance (DA) to government servants and to pensioners will be paid with an effect from April 1, 2022, the government indicated that the DA for them would not be revised this year.
“Unlike in many other States, government servants in Tamil Nadu have been paid salaries in full and without any delay throughout the entire COVID-19 pandemic period. In many departments, government servants have served selflessly, often putting their own life to risk in this period. I am sure that government servants will appreciate the difficulty that the government will face in enhancing Dearness Allowance at this stage,” Mr. Rajan, who is also Minister for Human Resources Management, said.