Allow states to borrow unconditionally with prescribed limits: PTR to Centre

Tamil Nadu has asked the Union Government to allow state governments to “borrow unconditionally” within the prescribed limits which should be decided based on the capacity of the state to absorb higher investments.

This was among a slew of demands Finance Minister P T R Palanivel Thiaga Rajan made before a meeting chaired by Union Finance Minister Nirmala Sitharaman on Monday.

“The Minister recommended that States may be permitted to borrow unconditionally within the prescribed limits and such limits should be decided based on the capacity of the State to absorb higher investments,” an official statement from the Tamil Nadu government said on Tuesday.

Also Read | P T R Palanivel Thiaga Rajan to release white paper on Tamil Nadu finances on Monday

On similar lines, the restriction of one project per annum per state from a given external agency should be discontinued to allow the market mechanism to function freely, Thiaga Rajan said, adding that such measures would benefit Tamil Nadu which is considered an “attractive investment destination.”

The minister also asked the Union Government to formulate a data sharing protocol that allows states to access data like Income Tax, AADHAR, Covid, among others, which would supplement the efforts of states towards a data-driven administration.

The state government feels access to the above mentioned data will allow it to ensure better delivery of welfare measures to the deserving. Officials said that the government wanted access to data from the Union Government as it embarks on an ambitious agenda to de-universalize the welfare measures and subsidies.

Thiaga Rajan, while releasing a White Paper on the state’s finances in August, had admitted that several thousand people who are not eligible to get Covid-19 relief amount of Rs 4,000 and batted for a data-driven mechanism to identify beneficiaries of social welfare schemes. As part of the process, the government is implementing the Data Purity project.

At the meeting on Monday, Thiaga Rajan said the recent reduction in prices of petrol and diesel by the Union Government has provided a “golden opportunity” to conduct a case study to analyze the impact of price on the elasticity of demand and supply, and on growth in general.

Thiaga Rajan also stressed the need for removing the bottlenecks in the expansion of 4 major airports of the state such as Chennai, Coimbatore, Tiruchirappalli and Thoothukudi.

In the context of Madurai Airport, the land acquisition and transfer to the Airports Authority of India have been completed and the Union Government should declare it as an international airport soon to facilitate more trade and flights to the region, the Minister said.

On the Thoothukudi VOC port, the minister said the port is of strategic importance to the nation and has a great potential to be a transhipment hub while emphasizing that the master plan for expansion of Thoothukudi port with the Outer Harbour project may be taken up soon.

He also demanded that the entire length of Chennai-Kanniyakumari be upgraded to 8 lanes in order to reduce logistic costs for the industries and urged the government to speed up 11 pending NHAI highway projects.

Talking about the government’s steps to improve the condition of power DISCOMs, Thiaga Rajan asked the Union Government to ensure an adequate and continuous supply of coal and to help in the development of and access to supplies of Chandrabila Coal Block in Odisha.

While highlighting the wind energy potential in Tamil Nadu, he nudged the Union Government to formulate a viable offshore wind development policy to further give an impetus to renewable energy development.

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