DROUGHT RELIEF MEASURES

3.   Tamil Nadu is reeling under one of the worst droughts in its history. The State experienced a deficit rainfall of (‑)45.8% during the southwest monsoon season. Though the northeast monsoon began well, the rainfall deficit in this monsoon by December 2002 was (-) 14.7%. The overall deficit in the year 2002 was (-) 25.4%.  The successive failure of monsoons has created conditions of severe scarcity of water for irrigation and drinking purposes. Non-release of Tamil Nadu’s share of water from the Cauvery river to the Mettur Dam by Karnataka Government has further compounded the problems. Having left the Kuruvai crop unsown, the farmers have now lost the Samba and Thaladi crops as well.

4.   This Government responded promptly to the emerging situation by declaring 28 districts, except Chennai district, as drought-affected. Relief measures aimed at providing gainful employment through construction of durable community assets, provision of supplementary nutrition, drinking water and relief to farmers among others, have been taken up.  I may be permitted to briefly touch upon the specific measures undertaken by the Government to provide succour to the affected people.

• Just as the impact of the drought and non-release of Cauvery water for the standing Kuruvai crops in the delta districts began to be felt, the Hon'ble Chief Minister convened a special meeting in Thanjavur in June, 2002, and announced a special relief programme for the three delta districts at a cost of Rs. 164.18 crores.  This has been successfully implemented.

• The Government sanctioned a total of Rs. 149.48 crores to combat the problems of drinking water supply in all the districts in the State. This has been utilised for deepening existing bore wells, installation of mini-power pumps, deepening and desilting of wells, extension of water pipelines to uncovered areas etc. Supply of drinking water through lorries is also being made in badly affected municipalities.

• Coconut farmers in Tamil Nadu have been badly hit because of the failure of the monsoons and the consequent drying up of trees. The Government has sanctioned Rs. 30.50 crores to the eligible beneficiaries as relief to undertake replanting.

• The Hon’ble Chief Minister's scheme for providing gift hampers to about 10-lakh households of landless agricultural labourers in the Cauvery delta districts at the time of Deepavali in 2002 at a cost of Rs. 210 per hamper was very well received. This was implemented at a total cost of Rs. 21 crores.

• The Hon’ble Chief Minister, Puratchi Thalaivi  J Jayalalithaa also launched a Special Noon Meal Programme for families of landless agricultural labourers in the delta districts with the objective of ensuring food security. Based on representations that provision of free rice would be better than giving a cooked meal, the Hon'ble Chief Minister announced that 30 Kg. of rice will be given free of cost to every family registered under the Special Noon Meal Programme from 1^st February 2003.  This has been implemented and will be continued till the Food For Work programme is fully operationalised.

• A special programme for employment generation in 9 districts of the Cauvery delta has been launched at a total cost of Rs. 217.09 crores following the failure of the Samba crop.

I am glad to announce that this Government will now implement a massive employment generation programme at a cost of Rs. 341.92 crores in all the 28 drought affected districts. This special Food For Work programme would have cash and rice components to be given as wages. The total allocation for the cash component is Rs. 85.48 crores.  Rice valued at Rs.256.44 crores would also be given to the beneficiaries.  The estimation of crop loss and area affected is underway.  We shall announce shortly a relief package for farmers who have been affected based on the pattern and amount to be announced by the Government of India.

5.    The Government presented a detailed Memorandum in September, 2002, to the Union Government giving the details of the failure of southwest monsoon, its impact and the relief assistance required. This Memorandum requested the Government of India for a total cash assistance of Rs.1434 crores and an allotment of 5.5 lakh tonnes of rice to be given as wages for drought relief works.  The Government of India sanctioned Rs.228.30 crores before setting off the opening balance in Calamity Relief Fund at the beginning of 2002-2003.  The net amount actually released by the Government of India was only Rs.133.06 crores along with 50,000 tonnes of rice.

6.    Following the failure of the northeast monsoon, the Hon'ble Chief Minister brought the gravity of the drought situation in the State to the notice of the Hon'ble Prime Minister. In response to the Hon'ble Chief Minister's request, the Union Government deputed another four-member Central Team to assess the severity and extent of the drought in February, 2003. In a detailed drought Memorandum presented by this Government, we have requested the Union Government to sanction an assistance of Rs. 2093.92 crores to Tamil Nadu along with Rs. 54.69 crores for water supply in Chennai. An additional 9 lakh tonnes of rice was also sought for the State to mitigate the effects of the drought.  From this, we have received an allotment of 75,000 tonnes of rice so far from the Union Government. Thus, the total allotment of rice so far is 1.25 lakh tonnes,  The other sanctions are still awaited. Thus, this Government has made a request for a total amount of Rs. 3527.92 crores as cash assistance and 14.5 lakh tonnes of rice in both the Memoranda given to the Government of India.  We are providing Rs. 276 crores in the Budget for 2003-2004 so as to enable the State Government to continue with various relief measures in the next financial year. 

FISCAL SITUATION

7.   The details of the complex fiscal problems inherited by this Government, the bold reforms package implemented by us along with further improvements planned, have been outlined in the Appendix to this Speech, which may be taken on record. I would like to inform this august House that had it not been for the extremely bold and far-reaching reforms initiated and carried through by the Hon’ble Chief Minister, Tamil Nadu would have slid irrevocably into the abyss of fiscal ruin and development-neglect.   

8.   The unprecedented nature and extent of erosion in the public finances of Tamil Nadu being witnessed today is the result of non-recognition of the gravity of the problem and absence of timely remedial action by the previous Government. Therefore, there are no easy and quick-fix solutions to the problems. This Government has the onerous responsibility of integrating the reform priorities with the development imperatives of the State. The interests of the poor and the needy have to be protected. Investments and equitable growth have to be promoted to enhance opportunities for employment and a better life for the people. There are also major problems relating to public debt management, controlling debt service costs and pension commitments of the State Government. The issue of payment of salary and pension arrears to Government employees impounded by the previous Government poses a formidable challenge to the process and pace of fiscal recovery. The reform programme has necessarily to be carried through a medium term.

9.   Given the fact that a stable fiscal situation is an essential pre-requisite for enabling the Government to implement its development agenda, we have decided to bring forth a legislative enactment on Fiscal Responsibility in the current session of the Legislature. This legislation will incorporate basic principles of State level fiscal management and financial discipline that needs to be observed in the future. It will also save future Governments from experiencing the serious fiscal problems that we have had to confront. 

10.   Hon'ble Members may recall that external funding agencies like the World Bank had moved away from Tamil Nadu in the absence of any effort at fiscal reforms by the previous Government. Meanwhile, all neighbouring States have benefited by such assistance and have been able to go in for larger Plan outlays while Tamil Nadu was left behind.  This Government has shown the will to undertake the reforms necessary for restoring the fiscal health of Tamil Nadu and taking the State forward on a higher growth trajectory. I am happy to inform the Hon'ble Members that the World Bank has now evinced keen interest in supporting our development programmes. The Union Government has backed our request to the World Bank for the sanction of an economic restructuring loan. We have assumed the release of Rs.1000 crores as the first tranche of this support in this Budget.  The World Bank has also come forward to process our development projects pending sanction for a long time. They include the Tamil Nadu Road Sector Project (Rs.2118 crores), the Water Resources Consolidation Project-II (Rs.2900 crores), the Poverty Alleviation Project (Rs.1156 crores), Tamil Nadu Health Systems Development Project (Rs.650 crores), the Tamil Nadu Water Supply and Sanitation Project for Rural Areas (Rs.2300 crores) and the Tamil Nadu Urban Development Project-III (Rs.750 crores). We also have, on the anvil, other new projects such as the Chennai Metropolitan Transport Project and the Tamil Nadu Primary Sector Development Project, which are to be taken up with the World Bank.  We are developing schemes and projects, which will be posed to other external agencies such as the Asian Development Bank (ADB) and the Japan Bank for International Co‑operation (JBIC).  Posterity will recall that it is only because of the decisive action and firm vision of the Hon’ble Chief Minister, Puratchi Thalaivi J Jayalalithaa that Tamil Nadu has been brought back on the development path.

TWELFTH FINANCE COMMISSION

11.   This Government welcomes the constitution of the Twelfth Finance Commission. The serious fiscal situation faced by most States is because of the total inadequacy of the dispensations of the Eleventh Finance Commission. We hope that the Twelfth Finance Commission will redress the grievances of the States. 

12.   The chronic financial stress being faced by most States requires serious attention. The Twelfth Finance Commission will have to enlarge substantially, the States' share of the divisible pool of Central taxes from the present level of 29.5%. This definitely needs to be done as most developmental responsibilities have now devolved on the States.  In making its recommendations on horizontal distribution between States, the Twelfth Finance Commission will have to chart out a bold new course of action.  Successive Finance Commissions in the past have indulged in the exercise of taking away the share of better-performing States and giving it to the laggard States.  This has to stop. The Hon'ble Chief Minister has made a forceful plea for a complete change in the thinking on the subject in her speech before the National Development Council in December 2002. Emphasis has to be placed on economic efficiency and performance, including proper fiscal management. The Twelfth Finance Commission has also to come out with a meaningful debt relief plan with special incentives to States that have ensured prudent financial management.  We shall be making a detailed forecast and also present the State's Memorandum to the Twelfth Finance Commission, when scheduled.

TENTH FIVE-YEAR PLAN

13.    Members of the House will be glad to know that our Hon'ble Chief Minister, Puratchi Thalaivi  J Jayalalithaa has secured an outlay of Rs. 40,000 crores for Tamil Nadu for the Tenth Five Year Plan Period (2002-2007). This has been made possible due to the untiring efforts of the Hon'ble Chief Minister, Puratchi Thalaivi  J Jayalalithaa following discussions with the Deputy Chairman of the Union Planning Commission in June 2002.  This has also been confirmed at the meeting of the National Development Council at New Delhi in December 2002.   At a time when Tamil Nadu's Annual Plan outlay was already low and slipping further, the Hon'ble Chief Minister, Puratchi Thalaivi  J Jayalalithaa actually ensured that Tamil Nadu goes forward on a new development path with an emphasis on poverty alleviation, accelerated growth in the primary sector, restoration of growth momentum to the manufacturing sector and a new buoyancy in the services sector.   The Hon'ble Chief Minister's 15-point programme, which I set out in my last Budget Speech, has been incorporated in the State's Tenth Plan.  The Tenth Plan targets an overall growth rate of 8%. To achieve this target, fiscal consolidation and accelerated development is a must.

ANNUAL PLAN 2003-2004

14.   Members of the House are aware that the Government was forced to scale down the approved Plan outlay in 2001-2002 from Rs. 6040 crores to Rs. 5200 crores.  It is to prevent this kind of a situation that fiscal reforms were undertaken during 2002-2003.  This has now enabled us to declare firmly that the approved Plan outlay of Rs. 5750 crores in the current year will be achieved in full.  It is with this new confidence that we propose to embark on a much larger Plan outlay for the year 2003-2004.  Members of the House will be glad to know that we are targeting to reach a Plan outlay of Rs. 7000 crores for the year 2003-2004.  This will be confirmed after discussions of the Hon'ble Chief Minister with the Deputy Chairman of the Union Planning Commission.

POLICE, PRISONS AND FIRE SERVICES

15.    Perfect maintenance of law and order is a sine qua non for rapid socio-economic development. The Hon’ble Chief Minister has taken extraordinary efforts to impart a new vision, direction and purpose to the State Police. 

16.   An outlay of Rs. 271.84 crores was allocated under the Modernization of Police Force (MPF) programme over the two-year period (2001-2003) for purchase of arms and ammunition, equipment, vehicles, communication facilities, construction of police quarters and other buildings. In pursuance of our commitment to opening 188 All Women Police Stations, 148 new All Women Police Stations have already become functional.

17.   The morale of the State Police stands considerably enhanced because of the welfare measures initiated by the Hon’ble Chief Minister. In an unprecedented effort, the Hon’ble Chief Minister spent five full days to hear and solve specific grievances of officers and men and women of the State Police. The grievance redressal machinery has been completely revamped and made meaningful to improve the morale of the Police. A grant of Rs. 1.38 crores in the current year was provided from the Tamil Nadu Police Benevolent Fund to enable the children of police personnel to pursue higher studies apart from monetary relief in special cases.  A sum of Rs. 1.75 crores was spent under the Tamil Nadu Police Health Scheme to provide the best medical facilities to police personnel and their dependents in 2002-2003. The Government has also opened crèches in six Police Commissionerates for the benefit of women police personnel to ensure proper care of their infants. The Police Housing Programme in Tamil Nadu is clearly among the best in the country.   As a result, the satisfaction rate of housing amongst the constabulary in Tamil Nadu is among the best in the country, and much above the national average.

18.    The total outlay for the State Police goes up to Rs. 1391.14 crores in the Budget Estimates for 2003-2004 from the Revised Estimates of Rs. 1291.49 crores in the current year. We have accorded the highest priority towards Modernization of the Police Force (MPF). An allocation of Rs. 130.98 crores has been made under this programme during the next financial year.

19.    Conducive living conditions in prisons are crucial for facilitating reform and rehabilitation of inmates. Under an ambitious plan approved by the Hon’ble Chief Minister, the Central Prison in Chennai would be shifted to a sprawling complex in Puzhal with the latest facilities. A provision of Rs. 10 crores has been made in the Budget for 2003-2004. We are awaiting the clearance of the Union Government for implementing a perspective plan for comprehensive prison reforms in the State.

20.    The Government proposes to gear up the facilities available with the Fire and Rescue Services Department. A Fire and Rescue Services Commission has been constituted under the chairmanship of a retired Judge of the Madras High Court to study and make recommendations on improving service delivery. New procurements such as purchase of fire tenders among others, at a cost of Rs. 4.20 crores, have been approved for implementation in the next financial year.

DEVELOPMENT IMPERATIVES FOR 2003-2004

21.    This Government has drawn up an ambitious and bold development agenda, which will be the focus of this Budget for 2003-2004. Its main themes include the following:

• Reinvigorating the primary sector comprising agriculture and allied activities such as horticulture, floriculture etc., animal husbandry, fisheries, irrigation and rural development.

• Special thrust to the manufacturing sector with the implementation of second-generation reforms.

• Accelerated infrastructure development with a special focus on the Chennai metro area.

• Special emphasis on the development of information technology and tourism in the services sector for generation of new employment opportunities. 

• Renewed emphasis on human resources development.

• Building a comprehensive social safety net and social security cover for the poor and the needy.

These basic themes form the core of the Budget for 2003-2004. It is in this broad context that I would like to spell out the specific plans and programmes of the Government.