Jayalalithaa seeks central aid to reduce debt...

Tamil Nadu chief minister J Jayalalithaa has sought a grant of Rs 100,000 crore from the Centre to reduce the debt level of the state.

The state’s fiscal deficit had increased five times in last five years while the revenue deficit increased 11.64 per cent in 2010-11 compared with previous year, according to a memorandum handed over by the chief minister to Prime Minister Manmohan Singh.

Jayalalithaa said the revenue deficit for 2010-11 had gone up to Rs 3,942 crore from Rs 3,531 crore in 2009-10 and was on the rise due to growing commitments on salary, pension and other welfare schemes.

 

The fiscal deficit has increased to Rs 17,888 crore since 2007-08. As a result, within the last five years, the outstanding debt of the state has almost doubled from Rs 57,475 crore in 2005-06 to Rs 1,01,541 crore in 2010-11, added the letter.

Further, in view of various welfare and development schemes undertaken by the new government, achieving zero revenue deficit and fiscal deficit below three per cent by the end of the current fiscal, besides restricting the borrowings as per the norms of the 13th Finance Commission would be difficult without the support of the the central government.

The chief minister also sought a special bail-out package of Rs 40,000 crore to wipe out the debt burden of state-run power distribution firm, Tamil Nadu Generation and Distribution Corporation Limited (Tangedco). With the state running in deficit of 1,500 Mw, even after purchasing 1,800 Mw from the open market, the demand-supply gap was being managed by the corporation through restriction and control measures like load shedding.

The corporation posted an accumulated loss of Rs 38,000 crore as on March 31, 2011, compared with loss of Rs 4,900 crore in 2005-06 due to the financial burden on account of buying power. The outstanding debt level has also increased from Rs 9,300 crore in 2005-06 to Rs 40,300 crore in 2010-11.

It also sought adequate funding under the Jawaharlal Nehru Solar Mission to set up 10 solar energy parks to generate 3,000 Mw power and also put up solar-powered street lights in the villages, which is estimated to cost Rs 45,000 crore. Besides, it wanted an additional assistance of Rs 1,125 crore per annum as 75 per cent central share for the recently announced solar-powered green house scheme under the Indira Awaas Yojana .

Jayalalithaa also sought financial assistance under the National Urban Transport Policy for the proposed mono rail project. The state recently announced plans to set up mono rail, the first phase of 111 km of which is expected to be ready in the next two years at a cost of Rs 16,650 crore, at Rs 150 crore per kilometre.

Among others, it requested a financial assistance of Rs 5,000 crore for the Tamil Nadu Road Sector Project by placing it under the World Bank's Phase II assistance, a special grant of Rs 1,800 crore over the next two years for upgradation of tertiary care institutions and a special package of Rs 450 crore for farm mechanisation in areas where System of Rice Intensification has been taken up.

TO SPEND RS 10,200 CRORE ON LAPTOPS
The state government is planning to spend Rs 10,200 crore over the next five years to provide around 6.8 million laptops to students, which was part of AIADMK’s manifesto promise. Chief minister J Jayalalithaa met the Prime Minister in New Delhi on Tuesday and submitted the memorandum in which she stated that the state had emerged as a favoured destination both for the domestic and multinational IT companies. This has opened new vistas of job opportunities for youth in Tamil Nadu. The state has decided to provide laptops to all students studying in higher secondary schools and also to the students studying in Engineering, Polytechnic and Arts & Science Colleges. The total financial implication works out to around Rs 10,200 crore. In the first year of the programme, 912,000 laptops will be provided.