Raghuram Rajan, former CEA Subramanian on TN economic advisory panel

Tamil Nadu Governor Banwarilal Purohit laid down the new state government’s blueprint for economic revival in the Legislative Assembly on Monday (June 21). Purohit announced the setting up of an economic advisory panel comprising former Reserve Bank of India governor Raghuram Rajan, former Chief Economic Advisor (CEA) Arvind Subramanian and former Union Finance Secretary Dr. S. Narayan.

The panel will also have Nobel Laureate Prof Esther Duflo of the Massachusetts Institute of Technology (MIT), USA, and Prof Jean Dreze, a Development Economist.

Tamil Nadu’s new finance minister Palanivel Thiaga Rajan nurses a feeling that while the state’s contribution to central taxation has been increasing steadily over the last 20 years, it doesn’t get much in return.

Palanivel Thiaga Rajan is keen on getting numbers and statistics and analysing them to prove his point right. Hence, the constitution of a high-powered panel.

At the customary address during the first session of the 16th Assembly of Tamil Nadu, Governor Purohit said the government will issue a white paper on state finances in July. He said the government is keen on bringing down the state’s overall debt burden and improving its fiscal position.

“The government of Tamil Nadu is aware of an economic slowdown, but it is equally determined to change Tamil Nadu into a state with self-respect, taking full advantage of the available limited window of the demographic dividend, and empower its people with their rights and make the state prosperous in all respects, as envisioned by Thanthai Periyar,” the Governor said as DMK MLAs cheered on.

“Strong states are needed to create a strong Union. This government will staunchly stand in defense of the rights of the States and constitutionally oppose any infringement of such rights. At the same time, we will maintain a cordial relationship with the Union government as partners in the process of nation building, in line with our policy of extending our hand in friendship, even as we speak up for our rights,” Purohit said.

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The governor also said that the DMK government will introduce a separate annual budget for agriculture to increase productivity and protect farmers’ interests.

It is no secret that Tamil Nadu is under heavy debt. Former Chief Minister O Panneerselvam’s interim budget in February this year estimated the debt at Rs 5 lakh crore in 2021-22. Besides, revenue generation has taken a beating, thanks to second COVID wave, which has severely affected industry and service sector earnings. In addition, Chief Minister M K Stalin recently introduced a massive COVID relief programme, doling out Rs 4,000 per family.