Why Tamil Nadu Budget is a model for others

As the first ever e-Budget in the state, it is also being hailed as a prelude to the government’s efforts to make governance tech-driven and paperless. 

Published: 16th August 2021 07:23 AM  |   Last Updated: 16th August 2021 07:23 AM   |  A+A-

TN budget Tamil Nadu Finance Minister

TN Finance Minister Palanivel Thiagarajan with CM Stalin MK Stalin before presenting the budget.

The recently unveiled Tamil Nadu Budget borrows from a popular Rajnikant repartee: “Naan late-aah vanthalum, latest-aah varuven”, roughly translated as “even if I come late, I’ll be the latest (in style)”. When it finally arrived, the much-awaited state Budget threw up several surprises. A spin-off agriculture Budget, which stressed on the state’s distressed farmers and the woes inflicted on the farming community, has been the most important departure from the routine. As the first ever e-Budget in the state, it is also being hailed as a prelude to the government’s efforts to make governance tech-driven and paperless. 

Finance Minister Palanivel Thiaga Rajan, who released a White Paper on the state’s precarious financial position early last week, had to shelve his plans to beef up revenue streams for the time being, citing the pandemic. On Chief Minister M K Stalin’s instruction, the FM reduced the effective rate of tax on petrol by Rs 3 per litre, primarily to help two-wheeler owners. It has effectively drilled a Rs 1,160-crore hole in the state exchequer.

The poll promise of Rs 1,000 financial assistance for each family has to wait as the government revealed for the first time that the scheme is only for the poor and a mechanism will be formed first to identify eligible recipients. The current regime believes that the absence of adequate data on beneficiaries hampers its ability to efficiently implement welfare schemes and deliver social and economic justice. So, going forward, it is going to be another focus area.

Given the revenue fall in the revised estimates, the state may be staring at a ballooning public debt. The White Paper said the public debt was already high at Rs 5,70,189 crore, quoting the interim budget estimates of FY22, which translates to Rs 2,63,976 per family in the state. But the revised estimates suggest that the state’s revenue deficit for FY22 will end up much higher, by Rs 16,496 crore. It points to a further deteriorating condition. In a nutshell, bringing the state finances back on track will be a Herculean task ahead for the DMK government. But it has made a remarkable start by identifying the problems. It is a model that could be emulated by other states.


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  • Bhaskar

    Looks like this article was written by the FM himself :-)
    2 months ago reply
    • Indian

      You think everyone is like Modi? Nevermind
      2 months ago reply
  • B S MANI

    Dear CM & FM Tamilnadu - How many of your MLAs are Tech Savvy to see your presentation? The MLAs don't even know to respond to what's app queries!
    2 months ago reply
    • Indian

      Far better than the BJP MPs!!!
      2 months ago reply
  • S A Raghu

    The problems of state finances (and Central finances too) are only too well known and have not changed in 75 years. There are only variations in themes among states. We do not a need a white paper for this. The sad fact is that it has become impossible in India for an elected Government to escape populism
    2 months ago reply
    • Indian

      TN messed it up in the last 10 years
      2 months ago reply
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