A high-level committee headed by former Governor of Reserve Bank of India (RBI) C Rangarajan has recommendeded the Tamil Nadu Government to come out with an urban employment guarantee scheme, increase capital expenditure by Rs 10,000 crore and set up a Rs 3,200 crore fund to support construction workers.
The committee was set by the State Government to recommend measures to bring the state back on the growth path post the pandemic lockdown.
The committee has submitted its report to Chief Minister K Palaniswami and Deputy Chief Minister O Panneerselvam.
Speaking to reporters, Rangarajan the state economy is estimated to grow in 2021 at 1.71 per cent, but there may also be a slide.
He said looking at the Goods and Services Tax (GST), tax on petrol and power consumption, in two month’s time the state’s economic levels may be back to pre-Covid-19 levels. Rangarajan said that the committee has recommended creating an urban employment guarantee scheme in the lines of rural employment guarantee scheme.
Similarly, the government should increase its capital expenditure by around R 10,000 crore and also spend Rs 3,200 crore in the construction workers fund to generate employment opportunities. When the demand is low, the government has to increase the spend, he said.
The committee expects the state’s debt will increase this year as the health care expenses has increased while income has come down.
Tamil Nadu has to spend a further sum of Rs 5,000 crore towards health.
On the industrial front, the committee has recommended increasing the capital of Tamil Nadu Industrial Investment Corporation to Rs 1,000 crore so that the organisation can lend long term.
“Setting up of industrial parks and industrial townships and bringing in the credit guarantee scheme for small scale industries are other recommendations,” Rangarajan said.