CHENNAI: The rising debt burden of the State government, which exceeded `1 lakh core in the current financial year, found an ally in Finance Minister K Anbazhagan on Wednesday as he told the Assembly: Kadan thaan thamizhagathai vazhavaithu kondirukkiradhu (debts are keeping Tamil Nadu alive).
The minister said there was nothing wrong in availing of loans. In fact, he defended, schemes to establish social equality could be implemented only by doing so.
However, Anbazhagan had no answer when asked if the government had any measure up its sleeve to put an end to the piling debts of the State.
He argued that there was no connection between the loans availed of and the freebies given by the government.
All amounts received through loans were spent on capital expenditure and not on freebies, he added.
Incidentally, very recently, the Finance Minister had likened the rise in prices of essential commodities to natural calamities, adding that no one could be blamed for it.
During the discussion on the interim budget for 2011- 12, CPI floor leader V Sivapunniyam questioned the rationale behind the increasing debt burden of the State government and demanded a white paper on the same.
Anbazhagan deftly skirted Sivapunniyam’s query on what the source of funds for freebies were if loans were not spent on them, by saying that availing of loans was seen as an indication of growth.
Law Minister Durai Murugan said financial institutions extend loans only after checking the repaying capacity of the government. Countering this, Sivapunniyam asked the government to spell out the loans repaid so far. He went on to add that instead, the debt burden had gone up to `1,01,541 crore this year.
Coming to the rescue of the DMK government, Congress whip Peter Alphonse pointed out that the US, Japan, China and the European Union could make progress only by availing of loans. Further, he added, institutions like the International Monetary Fund were functioning only to extend loans.