Tamil Nadu Budget 2020: Will it revive the weakening state of the economy?

Tamil Nadu Deputy Chief Minister and Finance Minister O Panneerselvam has, on Friday, tabled the state's fiscal budget for 2020-21 in the first assembly session of the year. This budget would be the last full-time budget presented by the current government as the five-year term of the current assembly is due to get expired next year.

Despite being the last full-time budget, the ruling ADMK government has carried more expectations towards reviving the aberrant and uncertain state of the economy and to install the permanent and stable corridors of employment opportunities as the state has been reported with unprecedented unemployment rates in recent years and apart from the allocations of funds, the state government has been under the pressure of addressing the issue of rising debts and this budget comes at the high time when the ruling government is nearing to face the urban local body elections.

O Panneerselvam presenting the Budget in the assembly - Feb 14, 2020


As ADMK's tradition, Panneerselvam arrived at the assembly with the budget documents covered with the briefcase that had former Chief Minister and party's supremo Jayalalithaa's portrait. He started presenting the budget at 10 am with the larger expectations of running the government mechanisms with the reviving lubricants. He stated that "We hope the Center sets aside enough funds for the state to offset the impact of the 15th Finance commission".

Here are the key takeaways from the tenth budget of Panneerselvam:

  • He stated that the government has incurred the total expenditure of Rs 2.41 lakh crore in 2019-20 while the revenue was recorded Rs 2.19 lakh crore in the same period that caused the fiscal deficit of Rs 22,226 crore. Panneerselvam further stated that the state government has estimated that the total debt of the state for the fiscal year 2020-21 would be Rs 4.5 lakh crore - the debt has been increasing each year.
  • The government allotted Rs 74.08 crore for the development department while Rs 12.21 crore was reserved for constructing a museum at Keezhadi and the state archaeological department would get Rs 31.93 crore. 
  • The Finance minister stated that Rs 1,360 crore would be allotted for disaster management and Rs 392.07 crore would be given for the Prisons Department. 
  • The government awarded Rs 100 crore for the much welcomed Amma Canteens, that was launched by former Chief Minister Jayalalithaa. 
  • The state has allocated Rs 11,894 crore for the agricultural department which is one of the highest allocations.
  • With the view of improving the schemes and infrastructures for the fishing communities, the state government allotted Rs 298.12 crore while the fisheries department would be given Rs 1229.85 crore. 
  • The Department of Rural Development would be getting Rs 23,161 crore for the fiscal year to enhance the rural communities while Rs 6991 crore has been allotted for the irrigation department.
  • The Mid-day meal scheme which feeds the government school students with free and nutritious lunch would be allocated with Rs 1,863 crore and
  • Rs 375 crore was allotted for Mahatma Gandhi Rural Employment scheme and this allocation has come at the crucial time when the state is facing high unemployment. Rs 18,540 crore has been allotted for municipal administration and water supply department. With the movie of upgrading the Chennai-Kanyakumari industrial corridor, the government has allotted Rs 1000 crore.
  • Rs 607 crore was allotted for Micro, Small and Medium Enterprises (MSME) and the Department of Information Technology has been provided with Rs 153.97 crore and Rs 4109 crore was allotted for Adi Dravidar welfare schemes, of which Rs 2000 crore would be spent for their education.
  • Handloom and Handicrafts department gets Rs 1224.25 crore. After the government has obtained Environmental clearance for the Athikadavu-Avinashi scheme, the budget has allotted Rs 500 crore for the project. The state government has announced that the CCTV cameras would be installed in all the buses in the state.
  • It also announced that the road safety directorate will be constituted to lower the road accidents and Rs 500 crore would be allotted for the scheme and the government has allotted Rs 15,863 crore for the Health Department. The school education department would be getting Rs 34,181 crore while the higher education department has been allotted with Rs 5,052 crore. The government has targeted to build 1,12,876 houses in the next financial year and for women safety, the government has allotted with Rs 71 crore.


The Budget has brought mixed reactions from the various stakeholders and while addressing the reporters outside the assembly, Opposition leader and DMK President M.K.Stalin stated that the tenth budget of Panneerselvam is inadequate budget and it shows the Tamil Nadu government is following the Central government. After the completion of the budget, Finance secretary Krishnan has stated that the TASMAC has earned Rs 30,000 crore in the past financial year.