The Tamil Nadu government will release a 120-page white paper on the precarious condition of the state’s finances, on August 9. Finance Minister P.T.R. Palanivel Thiagarajan will release the white paper, which will highlight the fiscal mismanagement during the past 10 years of AIADMK rule in Tamil Nadu.
The white paper will be released ahead of the presentation of Tamil Nadu’s revised budget for 2021-2022, scheduled on August 13. While the budget will be an e-budget or paperless budget for the first time in the history of the state, the white paper is believed to be a prelude to the budget, pointing out the precarious financial situation of the state.
In an earlier interview to THE WEEK, Thiagarajan had spoke on the need for a white paper. “We do not know if the debts accounted are reliable. So, we say we want a white paper,” he had said. The minister had made it clear that the vote-on-account, presented by the previous government before the budget, did not reflect the actual financial situation of the state.
Sources in the government say there has been unprecedented mismanagement in finances in every department, particularly after the death of former chief minister Jayalalithaa. The state’s debt burden increased manifold during the past few years after Edappadi K. Palaniswami took over as the chief minister. Tamil Nadu’s fiscal deficit stands at Rs. 92,305 crore for the year 2020-21, while it was Rs. 53,038 in 2019-2020, according to the unaudited provisional figures from the Comptroller and Auditor General (CAG). The state’s debts had crossed Rs. 5 lakh crore in February this year. The government’s liabilities, which stood at Rs.1.31 lakh crore in 2011-12 when the AIADMK took over, increased to Rs. 4.86 lakh crore in 2020-21, when the AIADMK left office.
Sources say the white paper will also reveal the loss of revenues during the past decade. In fact, some of the schemes announced by the DMK government, including the monthly grant of Rs.1,000 for women households and free LPG cylinders, have been put on hold due to the financial situation of the state, say sources.
This is not the first time a white paper of the state’s finances being released in Tamil Nadu. The first time it was released was exactly 20 years ago in August 2001. The white paper, tabled in the assembly along with the budget by the then finance minister C. Ponnaiyan, said the salaries and pensions to the government employees ate into the state’s revenues. Ponnaiyan, in his budget speech on August 18, 2001, said, “The objective of the white paper is to apprise the honourable members and the people of Tamil Nadu, of the precarious state of finances inherited by this government.” In 2001, during her speech at the Planning Commission, Jayalalithaa had said her government was forced to submit a whit paper on the state’s finances. “It is a fact that the finances of the state government have deteriorated rapidly since the mid 1990s. The situation in Tamil Nadu is a matter of concern as both our revenue and fiscal deficits have grown in the last five years. My government has already laid a white paper on the state go our finances in the legislative assembly. We have identified the critical areas that need corrections,” Jayalalithaa said.