Palanivel Thiagarajan unveils 'White paper' on TN's finances: What's the motive and how it troubled ADMK?

The much-awaited 'white paper' on Tamil Nadu's financial condition was unveiled by the state Finance Minister Palanivel Thiagarajan on Monday, four days ahead of presenting the first budget of the MK Stalin administration. The 'white paper', which is the first declaration in twenty years, was crafted in a fashion of giving more trouble to the previous ADMK regime and left the people frustrated for the possible surge in the taxes and services to increase the revenue. 

The white paper on finances would normally include the state's liabilities and the reasons for loss of revenue in various sectors. Ahead of the unveiling, Thiagarajan, while speaking to a news agency, said that the white paper would primarily be aimed at discussing the financial position of the state during the ten-year rule of the ADMK. The white paper on finances had become a talking point in the state after Governor Banwarilal Purohit announced it in the first assembly session of MK Stalin's government.

Usually, the White paper on certain issues will be released after the ruling government was demanded by the opposition parties to release it as a document of declaration. Tamil Nadu had seen the release of nine White papers so far and it was first released by the then Chief Minister MGR in 1977. While most of the White papers were for matters pertaining to the calamities and disasters like floods, only two, including the current one, were for the financial condition. Previously, the White paper on finances was released by the then Finance Minister Ponnaiyan in 2001, when J Jayalalithaa was the Chief Minister. 

After twenty years, Tamil Nadu Finance Minister Palanivel Thiagarajan had on Monday released the White paper on the finances with the keen concentration of the ADMK's ten-year rule. Unlike the typical one where there would be a player of demand, this White paper was wantonly released by the DMK without any furious demands in MK Stalin's bid to picturize to the Tamil Nadu people how the ADMK government left the state treasury with losses and debts while it stepped down from the reign. 

The White paper on finances has also carried the notion of portraying DMK's transparency in finances and its efforts to inform the Tamil Nadu people about their right to know the financial condition. The DMK government has functioned with the plan to table the white paper before presenting the revised budget and the financial mechanism of the state had delved into the ADMK regime and prepared the document to put the ball on ADMK's court that they are the sole reason why the state is stumbling financially. 

After months of work, Palanivel Thiagarajan has released the white paper on finances on Monday at the Chief Secretariat. Drawing huge attention across and beyond the state, the Finance Minister addressed the reporters while releasing the 120-page document. The document has revolved around ADMK's ten-year regime and highlighted that how the state is suffering financially as the sequel of the flawed objective of the ADMK government. The document was a total bombshell, irking the ADMK leaders as they were pushed to take the blame. 

Some of the revelations were in the fashion of shocking the entire state. The white paper said that each family in Tamil Nadu is been burdened with a debt of Rs 2,63,976. The finance minister underlined that the revenue deficit of Tamil Nadu during the 2011-16 ADMK regime was at Rs 17,000 crore and the same was stood at Rs 1.50 lakh crore during 2016-21. He noted that the state had faced an unimaginable rate of revenue deficit in the last five years and Tamil Nadu's financial condition had deprived to a state that the immediate expenses are to be met through acquiring debts. 

Indicating that there was no proper funding channel in the ADMK regime that helped to pile up the revenue of the state, Palanivel Thiagarajan said that Tamil Nadu has faced a severe revenue deficit than any other Indian state in the last five years and as the state's power to repay the debts had decreased, it has been pushed to witness the rise of interest rates. He further noted that the Tamil Nadu government had faced a loss of Rs 2,577 crore as the sequel of ADMK's failure in conducting timely polls for the local bodies and added that the Reserve Bank of India had also observed that the revenue is declining in the state.

By citing that the revenue rate has decreased to 4.65% in the ADMK regime from 13.89% when the DMK was in power in 2006-11, Palanivel Thiagaran had predicted that the fiscal deficit for the Tamil Nadu government would be at Rs 92,305 crore in the upcoming financial year. In a tone of castigating the Union government, Thiagarajan has said that the Union government is yet to release Tamil Nadu's GST due of Rs 20,033 crore. The Electricity and Transportation department had a debt of over Rs 2 lakh crore and the finance minister has shockingly revealed that Rs 87.31 crore is being paid per day as interest for the debts brought by the Tamil Nadu government. 

He said that the state Electricity department is running in a debt of Rs 1,34,000 crore and added that the tax revenue from petrol had also decreased. While the white paper on finances had poured trouble to the ADMK regime at the time of the budget session where DMK would slam the former ruling party for its flawed financial policies, Thiagarajan had also hinted that the people should be ready to pay more on taxes and services to increase the revenue of the state, before the financial situation gets inundated by deficits and losses. 

Are taxes and costs going to rise in the state?

The document from the Finance Minister signals that such an increase would be inevitable, adding more financial distress to the people. Thiagarajan said that the vehicle tax remains intact for the past fifteen years, hinting that the tax in this vertical would be increased. He said that the state must drive on the path of development by collecting proper taxes and asked how the government can function without taxes. He also said that the zero tax budget will be useless. 

He said that the scale of debt in the Electricity and Transportation departments is in an alarming state, leaving a prediction that the electricity cost and bus fare could be raised to meet the growing financial burdens. He added that the increase in tax revenue was at 11.4% during the DMK's rule and it had decreased to 4.4% during the ADMK's regime. He further revealed that the local bodies are yet to pay Rs 1,743 crore to the Electricity and Water resources departments and said that a government bus is incurring a loss of Rs 59.57 per kilometre. MK Stalin's first budget, which will be presented on August 13 by Thiagarajan, would reveal the increase of taxes and fares. 

How the state is earning revenue? 

Palanivel Thiagarajan said that the state is earning revenue through four channels- state tax, incomes that are not taxable, tax share from the Union government, and subsidies and cited that these channels were largely collapsed and added that the revenue had started to decrease even before the Covid-19 lockdown period. As per the interim budget, Tamil Nadu's total debt is Rs 5,70,186 crore and Thiagarajan further said that Rs 1 lakh crore was improperly spent during the ADMK regime. 

While addressing the reporters, Thiagarajan said that the white paper was crafted with the support of many people and asserted that he will bear the responsibility if any discrepancy is found. He added that the white paper on finances was produced after reviewing similar documents that were released by Andhra Pradesh and Punjab earlier. He cited that there was revenue surplus in the state during DMK's rule in 2006-11 and affirmed that the DMK government will now fix the financial glitches and flaws that prevailed during the previous rule.

Apart from the motive of letting the people know the state's financial condition, one of the important motives of this white paper is to put more pressure on ADMK and of course, seeking more time from the people to fulfil the promises the DMK had made during the polls by citing the worst financial condition. Earlier, in an interview with a news agency, Thiagarajan said that there were multiple reasons the government has decided to bring out a white paper and the primary reason is the lack of transparency in Tamil Nadu's finances under the previous ADMK regime.