CHENNAI: The hallmark of the Tamil Nadu model is the human capital and a harmonious society, said Tamil Nadu Finance Minister P Thiaga Rajan at the TNIE ThinkEdu Conclave, on the topic ‘The Tamil Nadu Model: Lessons for India’, chaired by author and analyst Shankkar Aiyar.
Commenting on the ‘Revdi culture debate,’ he said that the first question that comes up is who decides what is populist. “Some of the freebies will be accretive. Some will have mixed outcomes - they will add some value and also create inflation/some other problems. So these things need to be thought of carefully,” he said.
He said that providing free television was also on the principle of social justice but it provided ancillary benefits that were not expected. “Then CM Karunanidhi wanted to make sure that nobody had to stand outside other people’s house and watch television,” he said, adding it had additional benefits of rural people becoming aware of the world and increasing presence of women in the workforce.
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Replying to the question that Tamil Nadu spends Rs 1 lakh crore in subsidies while the total expenditure of all the states put together on subsidies is Rs 3 lakh crore, he said that the state’s finances were in a really good shape with schemes that are considered freebies since Fiscal Responsibility & Budget Management (FRBM) Act was passed in 2014. “Last year, we showed a huge improvement in the debt-to-GDP ratio. This year, there will be another huge improvement because I am making the budget numbers ready. About 90% slide of seven years would be wiped out in two years. We have not changed our philosophy that human development would be at the core of it,” he said.
Comparing the mid-day meals scheme and the morning breakfast scheme introduced by the DMK recently, he said that more than 50-60% of funding is spent on salaries in the midday meals scheme so the delivery model was improved for the breakfast scheme but the principle remains the same. “We want to feed the children because that is the greatest investment we can make in our future. Our model of success starts with letting people be well-fed, well-educated and becoming healthy human beings. The rest of it will fall in place. Another model will say let me build roads, let me build ports and then they will come. That is the union’s model,” he said.
The minister added the fiscal deficit was 5.21% before DMK took over out of which 3.25% was revenue deficit. “Based on the reports already submitted in the Assembly, we will now be trending towards maybe 1 or 1.25% revenue deficit. In a growing economy, it is the job of the government to borrow up to 3% and borrowing for capital expenditure is a good thing,” he added.
For being called a voice of dissent, the minister said, “I am the establishment. I am the finance minister in a large industrial state, one of the biggest economies in the country. If I am seen as a voice of dissent, something is structurally wrong.”