Governor seeks Rs 2,000 crores from Centre for Tamil Nadu

Governor Ch Vidyasagar Rao on Monday explained in detail how Tamil Nadu is being affected due to the Central tax devolution fixed by the 14th Finance Commission.

CHENNAI: Governor Ch Vidyasagar Rao on Monday explained in detail how Tamil Nadu is being affected due to the Central tax devolution fixed by the 14th Finance Commission as well as demonetisation and sought an annual grant of Rs 2,000 crore. 

Delivering his first address to the Assembly, Rao said though demonetisation would bring a long term dividend to the economy, it had a short-term negative impact, particularly on the informal sector, farmers and small traders that may last longer than expected. 

Ch Vidyasagar Rao
Ch Vidyasagar Rao

The Governor said the impact of demonetisation had been particularly severe on the resources of the states as tax revenue collection had slowed down in the last few months.

“As a mechanism to tide over this crisis, the State has requested the Government of India to increase its share on centrally sponsored schemes from 60 per cent to 90 per cent for the next two years. I hope that this request will also be considered positively,” he added.

The Governor also pointed out that Tamil Nadu has been unjustly denied its due share of central tax devolution by the 14th Finance Commission, which had reduced the earlier inter-se share by 19.04 per cent, the highest loss suffered by any State in the country.

The Governor recalled that reduction in the horizontal share implied that although the Finance panel had increased the states’ share in the divisible pool of central taxes from 32 per cent to 42 per cent, Tamil Nadu received only a meagre 2.98 per cent additionally, if normal growth of the central tax collection during the first year of the award period i.e. 2015-16, was taken into consideration. 

In comparison, other States had benefited by at least 30 per cent. “I hope that the Government of India, which places great emphasis on cooperative federalism, will consider the request to treat Tamil Nadu as a special case by providing an annual grant of Rs 2,000 crore during the award period in order to mitigate the impact of reduced devolution,” the Governor added.

Stating that the State government sanctioned Rs 585.45 crore to carry out immediate relief measures in the districts affected by cyclone Vardah, the Governor urged the Centre to consider the TN’s request for an assistance of Rs 1,972.89 crore for immediate relief and restoration works and Rs 20,600.37 crore towards permanent restoration works.  He also reiterated the demand for Rs 39,565 crore for drought relief measures across the State. 

The State would continue to pursue with the Centre the issue of defreezing the assets of Nokia in Sriperumbudur to facilitate its revival, the Governor said. Giving a detailed account on the investment proposals made during the Global Investors Meet, 2015, the Governor said within a year Rs 25,020 crore worth cumulative investment had already taken place and all the remaining projects were being closely followed up. The government was preparing to host the next Global Investors Meet, he added. 

Paying tributes to late chief minister J Jayalalithaa, Rao announced that a massive greening programme would be launched on February 24 to mark the 69th birth anniversary of Jayalalithaa, to replant trees in public lands.

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