Disturbing signals on financial front

By Our Special Correspondent

CHENNAI, APRIL 2. Tamil Nadu's financial scenario is on a slippery wicket, going by several indications, though it may not require an immediate ``Passover'' to free it from the burgeoning deficit.

Despite official claims that the State's overall financial position is ``manageable'' as it enters the year 2000-01, the latent crisis is yet to burst forth, what with the Chief Minister, Mr. M. Karunanidhi, doing a tenuous balancing exercise.

If, in the just ended fiscal year, the State posed a considerably lower deficit at about Rs. 160 crores with revenue receipts having gone up and Government upping its market borrowings, sources admit in private that the overall liquidity position is not very happy.

Just take the case of Tamil Nadu's subsidy burden. The food subsidy bill this year will peak an all-time high of Rs. 1700 crores, against Rs. 1000 crores last year, as the DMK Government decided not to pass on the hike of the enhanced Central issue price of rice to PDS consumers.

Yet another major item is the power subsidy, which, even according to official figures, will go upto Rs. 868 crores this year. This despite the Government, a few years ago, having capped its cash outgo to the Tamil Nadu Electricity Board (TNEB) at Rs. 250 crores annually for free power supply to all categories of farmers, apparently under pressure from multilateral funding agencies.

Equally disturbing is the fallout of the implementation of the Central fifth Pay Commission's recommendations after the earlier UF Government's `virtual bonanza' to its employees. Sources say that though the enhanced pay package for the bureaucracy would be a strong incentive against administrative corruption, in money terms the new wage bill has already begun to tell upon State finances.

Mr. Karunanidhi's latest budget itself is silent on this, but makes a helpless reference to the Pension bill shooting upto Rs. 2,517 crores this year from last year's Rs. 1691 crores. This is a ``rapidly increasing'' item of State spending, it adds.

Notwithstanding the buoyancy in revenue receipts last year, disbursements from the revenue account have exceeded income by a massive Rs. 3,700 crores. Adding to Fort St.George's woe is the rise in interest payments at Rs. 2582 crores last year, against Rs. 2121 crores in 1998- 99.

Knowledgeable sources say that these figures point to disturbing signals within. Though they admit that last year's Lok Sabha polls did, to an extent, cut into development expenditure, the Centre had, nonetheless, reimbursed most of the poll expenses of about Rs. 40 crores. There is still the problem of revenue expenditure outpacing revenue receipts over the years.

Besides increasing staff costs and subsidies, sources say that the cost of populist schemes like the ``Samathuvapurams'' added to the financial strain. `Equality' was better instilled in the minds of the young by an upgraded educational system rather than through supposedly utopian communities, sources underscored. Yet, in a pre-poll year all these are `no-touch sacred cows'.

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Section  : Regional
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