The Union Budget had largely positive announcements for poll-bound Tamil Nadu, with major allocations for road projects. It also hinted at Central funding for the Chennai Metro Rail Phase II project, transforming Chennai into a major fishing hub and establishing a multi-purpose seaweed park.
Apart from specific announcements, the State is likely to benefit from the thrust given to infrastructure, clean air, universal water supply to urban local bodies, agriculture, affordable housing, education, healthcare, manufacturing, revamping power distribution companies and pushing back fiscal deficit targets.
Besides announcing road works covering 3,500 km of National Highways in the State on an investment of ₹1.03 lakh crore, the Budget document stated that the construction of the 278 km Bengaluru-Chennai Expressway would begin in 2021-22. The construction of the Salem-Chennai Expressway would begin in 2021-22, it added.
At a pre-Budget meeting, Tamil Nadu Deputy Chief Minister O. Panneerselvam had requested approval for Phase-II of the Chennai Metro Rail project, with equal equity shares of about 15% each from the Centre and the State government.
He also urged the Centre to push back the fiscal deficit targets for States by two to three years at least, and increase their borrowing limit to 5% of GSDP in 2021-22 to manage expenditure on capital works and COVID-19 prevention measures.
The Budget allowed the States to achieve the fiscal deficit target by 2023-24 and permitted a normal ceiling of net borrowing for States at 4% of GSDP for 2021-2022, in keeping with the views of the 15th Finance Commission. An additional borrowing ceiling of 0.5% of GSDP would also be provided, subject to conditions.
The State’s request for funds for the Cauvery-Gundar Link project and Nadanthai Vazhi Cauvery, aimed at rejuvenating the Cauvery and its tributaries, along the lines of the Namami Gange project, did not find a mention in the Budget speech.
The State had also flagged pending dues of about ₹19,591.63 crore, including GST compensation claims and various other heads.
Meanwhile, Tamil Nadu is expected to get ₹23,039 crore as its share of net proceeds from Central taxes and duties for 2020-21, which has been revised downwards from the ₹32,849.34 crore estimated in last year’s Budget. For 2021-22, the State is projected to get ₹27,148.31 crore.
On the flip side, the Budget mentioned breaking the monopoly of State and private power distribution companies by introducing competition. Tamil Nadu has, thus far, strongly opposed the privatisation of the State-owned power distribution company.