For the first time in his tenure as the Tamil Nadu chief minister, Edappadi K. Palaniswami took a strong stand against the Centre as he opposed the Union government's move to impose conditions for additional borrowing of the states.
“The conditions put forth by the Union government for additional borrowing were onerous, unreasonable, lacked consensus and is against the spirit of co-operative federalism,” the chief minister said. He also said that it is unreasonable to attach conditions for borrowings beyond three percent of the State Gross Domestic Product (GSDP).
He was referring to the conditions put forth by the central government to avail benefit of raising the states borrowing limits from three percent to five percent of the GSDP.
In a strongly-worded letter to Prime Minister Narendra Modi, Palaniswami said his government is strongly opposed to the idea of removing free power supply for farmers and that it is the stand of his government that the mode of disbursement of subsidy should be left to the states. “Aggressively pushing a reform agenda on which a consensus is yet to be developed at a time when the states have approached the Centre for additional borrowing by out of sheer desperation, is not in keeping with the spirit of cooperative federalism,” he said.
The chief minister pointed out that the states had sought the additional borrowing, beyond the three per cent of the GSDP, mainly because of the significant shortfall in revenues due to the lockdown imposed in the wake of COVID-19 pandemic. "There are also large additional expenditure commitments. These are borrowings by the state government, which have to be repaid from future tax revenues of the states. They are not grants from the Centre. To attach needlessly demanding conditionalities to the additional borrowing requirements appears to be unreasonable," he said.
Terming the electricity distribution reform as 'politically sensitive', the chief minister strongly opposed snapping free power supply to farmers and made it categorical that the mode of disbursement of subsidy should be left to the state governments. He also batted for "greater latitude" to states to implement reforms.
In a state where both the Dravidian majors—ruling AIADMK and opposition DMK—bank on free power supply to farmers, Palaniswami’s outburst is looked at as a political move.
Incidentally, this is the second time after the pandemic broke out Palaniswami has sent a strongly-worded letter to the Centre. First time, it was to Railway Minister Piyush Goyal on quarantining the passengers coming in special trains from Delhi.
