CHENNAI: Tamil Nadu government has constituted a high-level committee headed by former Reserve Bank of India governor C Rangarajan to assess the overall immediate impact of Covid-19 pandemic on different sectors of state economy.
The committee, which will also consist of Finance Secretary S Krishnan as coordinator, will submit it's report to the government within three months, according to a Government Order.
The panel will also assess the impact of the lockdown, additional costs and implications due to social distancing and their precautionary measures.
Besides assessing the opportunities and threats in the short and medium term, the committee will come out with measures required to help the important sectors of the economy to overcome the Covid-19 pandemic.
The committee will also assess the impact of the crisis on state government's fiscal situation and way forward to improve the fiscal position, including increasing the tax; GDP ration and diversifying revenue sources and reprioritising expenditure.
The committee will also identify fiscal issues and economy protection measures the state should take up with the Union government for necessary action and possible sources of financing and funding for different sectors including infrastructure projects, small business and other enterprises.
Interestingly, it was on February 20, 2020, Deputy Chief Minister O Paneerselvam announced that an expert committee would be constituted to improve the tax: GSDP ration of Tamil Nadu. Now taking into account the Covid-19 pandemic and lockdown which has posed serious economic and fiscal challenges the role of the committee has been redefined.
The state government is facing a shortfall of Rs 10,000 crore worth of cash during the first two-phase of lockdown. With few or no collection at all through commercial tax which is usually around Rs 7,000 crore and excise other taxes (around Rs 2,000 crore), the state has been struggling for funds.