DMK turns right to targeted subsidies

POLITICS OF THE BUDGET

DMK turns right to targeted subsidies

Moves Away From Universal Welfare To Fix Economy

Shaik.Abdullah@timesgroup.com

14.08.2021

No more free lunches for all: That is the essence of the Tamil Nadu revised Budget 2021-22 presented on Friday in the assembly. As it slammed the AIADMK regime for “half-baked projects” that pushed TN into an economic crisis, it turned to the right for an escape route.

“What cannot be measured cannot be improved. Hence, a major initiative for smart metering for all public utilities in the state will be launched,” said finance minister P T R Palanivel Thiaga Rajan, articulating his intention to target people for subsidies — something that resonated more with the policy of his party’s ideological nemesis, the BJP. The man who sports ‘kumkum’ on his forehead in a party of non-believers declared that his government will follow a data-centric governance.

“We welcome it. It’s a step the DMK must take. Sooner or later they must follow in the footsteps of the Centre. When the Union government asked the states to make power meters compulsory for agricultural bore-wells two years ago, they opposed it. Now the DMK is forced to do it. This shows their duplicity and contradiction,” said R Srinivasan of the BJP, giving the DMK bouquets and brickbats in equal measure.

The state’s first paperless Budget was also the DMK’s first in 10 years. But the state’s financial situation didn’t suit its plans. Subsidies are being enjoyed by people from all economic backgrounds, the finance minister had complained in the white paper on the state’s finances released on Monday.

Those who use more electricity get more subsidies. At least ₹18,000 crore in electricity bills were under-recovered in 2020-21, he said. He also faulted unmetered water supply in Chennai.

“This was unfair and regressive as most of these connections were enjoyed by huge houses and mansions,” the minister said.

In the guise of boosting capital expenditure to provide economic stimulus during the pandemic, the previous government had sanctioned several “half-baked and ill thought out projects in the last minute” in the highways and irrigation sectors and for urban local bodies, Rajan said in his Budget presentation.

“We have made a careful analysis of such projects. Only genuinely beneficial projects justified based on detailed cost benefit analysis will be implemented,” he said”

Numbers told the story: TN’s fiscal deficit for 2020-21 was ₹92,305 crore (4.43% of GSDP). Each family had a public debt of ₹2,63,976. The average revenue deficit for all states and UTs was 0.1% of GDP in 2017-18 and 2018-19. It was 1.5% and 1.4% of GSDP in Tamil Nadu.

DMK MP T K S Elangovan called it a temporary measure. “We still believe in subsidy for all. The party will not deviate from its ideology. It’s only a short-term diversion, a temporary phenomenon because of the challenging economic circumstances created by the pandemic. We may revert to universalisation of benefits even in the next Budget if the situation improves,” Elangovan said.

The party’s friends on the Left seem to agree.

“The difference is in the intention. The BJP’s approach is to help corporates profit more. They want to reduce subsidies and help corporates get a bigger share of the public money. But the DMK’s egalitarian social ideology is to give subsidies to all those who deserve it. It’s a path-breaking Budget as it would increase the allocation for the poor based on data. The Budget would expand the scope of the schemes and take them to more people,” CPI leader C Mahendran said.