No New Taxes, No New Freebies, Big Boost To Chennai Infra: A Fiscally Prudent Tamil Nadu Budget 2019-20


Presenting the fourth budget of the All India Anna Dravida Munnetra Kazhagam (AIADMK) government in the Tamil Nadu assembly, Deputy Chief Minister O Panneerselvam, who is also the Finance Minister, said no new taxes were proposed for the 2019-20 fiscal, and expressed confidence that revenue deficit will come down in the coming years.

Tamil Nadu’s revenue deficit was estimated to be Rs 14,300 crore for the coming financial year. The net outstanding debt by 31 March 2020 will be Rs 397,495.96 crore. The debt to GSDP (gross state domestic product) ratio of 23.02 per cent, which the Finance Minister said was well within the debt-GSDP norm of 25 per cent.

The budget provided a major thrust to Chennai infrastructure development and also announced new investments to boost adoption of electric vehicles for public transportation and solar energy production.

Cyclone Gaja Relief And Rehabilitation

The budget allocated Rs 2,361.41 crore for immediate relief in the aftermath of Cyclone Gaja.

Panneerselvam also announced that 1 lakh new concrete houses will be built in the delta region of the state, which was devastated by the cyclone, flattening several villages.

The government will take up the construction of concrete houses at a unit cost of Rs 1.70 lakh to replace damaged huts in affected districts at a total cost of Rs 1,700 crore. The central government will contribute Rs 720 crore for this while Tamil Nadu’s allocation will be Rs 980 crore. The state’s share will be raised via debt financing from Tamil Nadu Rural Housing and Infrastructure Development Corporation.

Solar Energy

The budget provided a huge boost to the solar power sector with an objective to improve the power situation in the state.

Panneerselvam said that Tamil Nadu Generation and Distribution Company will be floating solar power projects in Theni, Salem and Erode at a capacity of 250 megawatts (MW), costing Rs 1,125 crore. Another 500 MW power project would be set up at Kadaladi at the ultra mega solar photovoltaic park. This is estimated to cost Rs 2,350 crore, said the Finance Minister.

Chennai Metro

With the first phase of 45 kilometres of the Chennai Metro set to be fully operational in a week, Panneerselvam announced a feasibility study for extension of the metro rail from Meenambakkam Airport to Kelambakkam metro bus terminus.

Panneerselvam also said that out of the approved 118.90 km of three metro rail corridors, Japanese funding agency JICA has already approved Rs 20,196 crore for implementing the priority stretches totalling 52.01 km from Madhavaram to Sholinganallur and Madhavaram to Chennai Mofussil Bus Terminus.

Electric Vehicles For Public Transportation

Another notable budgetary proposal was the plan to procure 12,000 new BS VI buses and 2,000 new electric buses at an outlay of Rs 5,890 crore with assistance from German firm KfW. The state government will introduce 2,000 BS VI buses in the state and 500 electric buses in Chennai, Coimbatore and Madurai during the first phase.

Higher Education

Panneerselvam announced that government arts and science colleges will come up in Rameswaram named after former president A P J Abdul Kalam. He added that Anna University will be sanctioned Rs 100 crore to upgrade infrastructure, including equipment, to impart teaching at international standards in the university and the engineering colleges falling under the control of Director of Technical Education.

Solid Waste Management And Forest Conservation In Chennai Region

During his budget speech, Panneerselvam pointed out that urbanisation and development have put pressure on reserve forests in and around Chennai with problems like encroachments and dumping of garbage. Rs 25 crore will be allocated for the conservation of the reserve forest areas in the city. He said this fund will be utilised to construct compound walls and live wires around the forest area in Chennai city.

He said a comprehensive solid waste management project for the Greater Chennai Corporation has been prepared.

“Administrative sanction has already been accorded for collection and transportation of solid waste in eight zones in two packages for a total cost of Rs 1,546.04 crore. Remediation and reclamation of existing landfills for Kodungaiyur and Perungudi under PPP mode along with the setting up of waste-to-energy plants is under consideration of the government at a total cost of Rs 5,259.10 crore. The government will accord sanction for this project shortly,” he added.

Comprehensive Integrated Parking Management Project For Chennai City

He also announced a Rs 2,000 crore comprehensive integrated parking management project for Chennai city that will create underground parking and multi-level parking facilities, and on-lane smart parking under PPP mode to accommodate 2 lakh four-wheelers and 2 lakh two-wheelers.

Housing For Urban Poor In Chennai

Panneerselvam also announced the launch of a World Bank-funded plan to construct 38,000 tenements at a cost of Rs 4,647.50 crore in Chennai and surrounding areas for poor families living on river banks by adopting best resettlement practices.

He said as a special measure the government will take up permanent flood mitigation works like building of reservoir across Orathur tributary of the Adyar river with an inter-basin transfer canal for water supply augmentation and flood mitigation near Orathur village in Sriperumbudur taluk.

MSME Focus

Panneerselvam said the industrial estates in Thirumudivakkam and Alathur will be further expanded to meet the growing demand for land for new micro, small and medium enterprise (MSME) units. SIDCO (Small Industries Development Corporation Limited) industrial estates will be provided separate industrial feeder lines to provide quality and uninterrupted power supply to MSME units.

Centre Of Excellence For Emerging Technologies

The Deputy Chief Minister said the government would harness artificial intelligence, machine learning, block chain, big data, drones and Internet of Things to serve the people better. For this, a centre of excellence for emerging technologies would be set up under the Tamil Nadu e-Governance Agency.