Govt. to seek greater devolution of funds

CHENNAI, MAY 20. Tamil Nadu will press the Centre for greater devolution of funds and tax revenues as the State exchequer was left ``practically empty'' by the previous DMK Government, the Finance Minister, Mr. C. Ponnaiyyan, said today.

As the people were already ``highly-taxed'', the new Government would not be able to impose ``fresh burden'' by way of penal taxes. Additional resources would have to be mobilised to overcome the deficit, he told reporters in an informal chat.

Disagreeing with the recommendations of the 11th Finance Commission on cutting the share of the better developed States, he pointed out that there was great unevenness in development in Tamil Nadu.

Arguing that industrial development could not be the basis for measuring the development of a State, he said about four crores of the total population of Tamil Nadu lived in rural areas. Of these, about three crores were in dry areas. These facts were not taken into account by the Finance Commission, he said and added that ``we are not getting our due share as developed States.''

Only 15 per cent of the people were covered by the income generated from the industrial sector, and the rest 85 per cent were in ``doldrums''.

Moreover, Tamil Nadu, which was one of the largest producers of sugarcane, could not impose sales tax on it as the produce was ``excisable''. Also, the State did not get its share from the corporate tax despite contributing greatly to the Centre's revenue on this count.

The revenue deficit of the State now stood at about Rs.210 crores. While this might not be ``alarming'', it still needed to be corrected, he said.

While hinting at reforms in the power sector, he said power theft was now shown as line loss. Efforts would be made to cut such losses, he added.

At present, the ``losses'' on account of subsidies were minimal. Thus, while there might not be any need to cut down on the subsidies, the Government would ensure that these subsidies reached the targeted sections. The biggest financial outgo was on account of wage revisions, he said.


While drawing up measures to mobilise resources, the Government would not disinvest from profitable public sector undertakings. Instead, the attempts would be to withdraw from the loss-making units, he said. Claiming that all sections of the people from petty shop owners to those working in powerlooms and largescale textile units were affected by the recession, he said this was not solely an ``all-India phenomenon''. Some of these problems were on account of the actions of the State Government, he said.

As the problems of the people in the rural areas had not been addressed until now, the Government was planning to regulate agriculture. As the demand-supply equation had a huge effect on the prices of agro-products, and therefore on the fortunes of farmers, the Government would guide farmers to decide what agro- commodities would be produced and on how many acres of land. Such regulation would restore stability of prices and protect the interests of farmers. A ``data bank'' would be created to facilitate this, he added.