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Budget 2006 - 2007 MEDIUM TERM FISCAL PLAN 5. Hon’ble Members of this House may recall the hopeless fiscal situation that had engulfed the State when this Government assumed office in May 2001. The Total Revenue Receipts during 1996-2001 had failed to keep pace with a phenomenal rise in the Total Revenue Expenditure of the Government leading to the ballooning of the Revenue Deficit year after year. This had led to heavy borrowings to cover the mounting Revenue Deficit which further led to an alarmingly high Fiscal Deficit. The rise in the interest burden had reached dangerous proportions. 6. The sectoral composition of expenditure during 1996-2001 revealed a perceptible decline in the share of developmental expenditure, namely, social and economic services as against general services comprising basically interest payments and administrative expenses. This skewed nature of resource allocation crowded out resources available for capital investment. The net result was a serious fiscal crisis that overwhelmed Tamil Nadu in 2001 causing the previous Government to fail in clearing payments even on works undertaken. As a result, development in Tamil Nadu had come to a grinding halt. 7. Hon’ble Members may recall that this Government had piloted a landmark legislation on Fiscal Responsibility in 2003 for enforcing transparency and the State’s accountability in prudent management of public finances. The Tamil Nadu Fiscal Responsibility Act, 2003 (as amended subsequently) requires the Government to present to the Legislative Assembly a Medium Term Fiscal Plan and also ensure that the fiscal targets specified therein are achieved. 8. I am glad to inform this House that this Government has so far achieved all the targets set out in the Medium Term Fiscal Plans presented before the Legislative Assembly. The State is well on track to eliminate the Revenue Deficit and reduce the Fiscal Deficit to a level below 3% of the Gross State Domestic Product (GSDP) by 2008-2009. An updated Medium Term Fiscal Reform Plan 2006-2007 is appended to my Interim Budget Speech. 9. Tamil Nadu’s spectacular reform achievements will entitle the State to receive substantial debt waiver during the Twelfth Finance Commission award period 2005-2010. The Hon’ble Chief Minister’s prescience in correcting the public finances at the right time has ensured enhancement of the revenues of the Government in the future. This is a refreshing contrast to the situation in the previous regime when in 2001 the future revenues of the State were drawn in advance by the then Government to finance its current expenditure. 10. Fiscal consolidation in Tamil
Nadu has been concurrently accompanied by re-prioritization of resource
allocation towards growth and development oriented sectors. The Annual
Plan outlays have increased by a record 75% from 11. In a short span of less than five years, Tamil Nadu has been pulled back from presenting a spectre of gloom and drift and restored to its erstwhile glory of being one of the best financially managed States in the country. The credit for this magnificent reversal of fortunes goes only to our inspired, benevolent and visionary leader, the Hon’ble Chief Minister. THE TAMIL NADU ECONOMY 12. The Hon’ble Chief Minister’s
15-point strategy aimed at putting the State on a sustainable growth
trajectory has laid the foundations for Tamil Nadu’s economic revival and
consolidation. After achieving a growth rate of 8.73% in ANNUAL PLAN 13. Hon’ble Members may recall
that the Hon’ble NATURAL CALAMITY RELIEF MEASURES 14. Hon’ble Members are aware of the unprecedented floods in 22 districts of the State following four major spells of torrential rainfall during October-December 2005. This Government took prompt action to provide relief and restore damaged infrastructure with an outlay of Rs. 1114 crores. It includes a very substantial Special Relief Package of Rs. 591 crores. I am glad to inform this House that this substantial and liberal relief package has provided immense succour to 34 lakh families in the State. In addition, a major programme to repair damaged public infrastructure such as roads, bridges, tanks etc., has been taken up with an outlay of Rs. 523 crores. 15. This Government submitted three detailed memoranda to the Government of India seeking a total assistance of Rs. 13,685 crores, 2.58 lakh tonnes of rice and 43,200 kilolitres of kerosene. The Hon’ble Chief Minister visited New Delhi to apprise the Hon’ble Prime Minister of the enormous magnitude of damage suffered and the assistance required by the State. The Union Government has so far sanctioned only Rs. 1000 crores and 21,000 kilolitres of kerosene. We urge the Government of India to sanction the required assistance as requested by this Government without further delay. 16. This Government’s effective handling of the devastating Tsunami in December 2004 has received wide international acclaim. After ensuring prompt and proper completion of the two phases of the relief operations, namely, search and rescue operations and provision of immediate relief, the third phase of permanent reconstruction and rehabilitation is progressing rapidly. 17. A total of 45,892 fully
damaged houses are being replaced with disaster resistant houses while
another 7670 partially damaged houses are being repaired. The fisheries
sector has been completely revived and the fishermen have been enabled to
resume normal fishing activities. Works on repairing damaged fish landing
centres, jetties etc., are progressing well and will be completed shortly.
The entire extent of 9130.16 hectares of affected agricultural and
horticultural land has been treated and reclaimed. A comprehensive
livelihood restoration programme has been rolled out in the affected
districts. 3241 18. As against the release of Rs. 812 crores by the Union Government for Tsunami relief and rehabilitation to Tamil Nadu so far, this Government has sanctioned Rs. 1136 crores. In addition, this Government has secured financial assistance of Rs. 2618 crores from various multilateral institutions for the long term reconstruction and rehabilitation programme. The Interim Budget 2006-2007 has a provision of Rs. 478.65 crores for Tsunami reconstruction and livelihood support. POLICE 19. The Hon’ble Chief Minister deserves accolades for ensuring that the law and order situation in Tamil Nadu was the best in the country during the last five years and continues to be the best. The elimination of the notorious sandalwood smuggler and forest brigand Veerappan and his gang, stands as one of the most spectacular triumphs of this Government. 20. This Government’s unprecedented accent on modernization of the Police Force since 2001 at an expenditure of Rs. 479 crores has improved the efficiency and operational preparedness of the Tamil Nadu Police. As against an expenditure of Rs. 1091.09 crores in 2001-2002, the provision for the Police Department in the Interim Budget 2006-2007 has gone up to Rs. 1575.98 crores. 21. Our State has shown the way to the rest of the country by recruiting the largest number of Women Police Personnel. Tamil Nadu is India’s first State to have an exclusive Women Police Battalion and Women Commando Force. Women Police personnel have been inducted as Traffic Marshals in the Chennai City Traffic Police who will now serve alongside men in ensuring orderly traffic management in the metropolis. PRISONS 22. This Government has accorded very high importance to upgrading the Prisons infrastructure in the State. The new Prison Complex at Puzhal near Chennai being constructed on an area of 212 acres with an outlay of Rs. 77 crores will solve a major problem of overcrowding in prisons. Tamil Nadu is the first State in India to have established Prisoner Adalats in all Central Prisons and Special Prisons for quick disposal of cases where the prisoners plead guilty of the offences charged with. The Interim Budget 2006-2007 has a total provision of Rs. 77.19 crores for the Prisons Department. FIRE AND RESCUE SERVICES 23. This Government renamed the Fire Services Department as ‘Fire and Rescue Services Department’ and has undertaken several measures to upgrade its infrastructure and improve the fire fighting capacity. Construction of 49 Fire Station buildings has also been sanctioned at a total cost of Rs. 10 crores. A major programme for the procurement of fire tenders, water lorries, fire entry suits, heat resistant gloves etc., has been taken up with an outlay of Rs. 14 crores. The Interim Budget 2006-2007 has a total provision of Rs. 98.08 crores for the Fire and Rescue Services Department. JUDICIAL ADMINISTRATION 24. There has been a major step up in the outlay for the Judiciary in Tamil Nadu during the tenure of this Government. The total provision for judicial administration has gone up to Rs. 205.37 crores in the Interim Budget 2006-2007 as against Rs. 141 crores spent in 2001-2002. The establishment of a New Bench of the Hon’ble High Court at Madurai in July 2004 is a feather in the cap of this Government. The modern court complex for the Bench at Madurai has been constructed at a cost of Rs. 65.45 crores. THE PRIMARY
SECTOR 25. Revival of the farm economy has been accorded the highest priority by this Government. The total outlay for Agriculture in the Interim Budget for 2006-2007 has been fixed at Rs. 861.23 crores. 26. The Hon’ble Chief Minister deserves to be complimented for putting at the forefront the lifetime concerns engaging small and marginal farmers and agricultural labourers. A massive new scheme aimed at providing them with comprehensive social security has been launched. The Hon’ble Chief Minister’s Farmers Security Programme has a provision of Rs. 201.56 crores in the Interim Budget 2006-2007. 27. The crop diversification movement launched by the Hon’ble Chief Minister has gained wide acceptance amongst farmers. This Government’s alternative crop strategy to encourage farmers to move away from water intensive cropping systems to those which require less water such as cultivation of Sweet Sorghum, Sugar Beet and Jatropha has been pursued vigorously. The Tamil Nadu Agriculture University is developing a hybrid variety of Jatropha which will yield 40% oil as against 20% oil extracted from the commonly used variety. A massive Agricultural Extension Programme has been launched in 2005-2006 in all the 385 Blocks with an outlay of Rs. 7.50 crores. 28. This Government’s Comprehensive Wasteland Development Programme has been a resounding success. An estimated 3.83 lakh acres of wasteland has been reclaimed and put to agricultural use. A total of 8833 farm ponds for harvesting rainwater have been constructed at a total cost of Rs. 26 crores during 2001-2006. The pioneering Precision Farming Scheme has received an enthusiastic response from the farmers and has been extended to seven districts with an outlay of Rs. 10 crores. 29. Horticulture development on a mission mode has received close attention of the Government. A massive programme for development of horticulture is currently under implementation in 13 districts with an outlay of Rs. 75 crores. Under the Hon’ble Chief Minister’s scheme for distribution of coconut seedlings to new born female infants, over 3 lakh seedlings have been distributed. Co-operative Credit 30. This Government has always made determined efforts to reduce the debt burden faced by farmers in Tamil Nadu. In 2001-2002, outstanding interest on crop loans to the extent of Rs. 311 crores was waived. This was followed by similar interest waiver amounting to Rs. 61 crores in 2002-2003 and Rs.62 crores in 2003-2004. In 2004-2005, the Hon’ble Chief Minister, Puratchi Thalaivi J Jayalalithaa, ordered the rescheduling of short term crop loans to the extent of Rs. 2598 crores availed of by the farmers up to 31st March 2004 for a five year period along with a two year principal repayment moratorium. 31. With a view to providing further relief, the Hon’ble Chief Minister has announced another major relief package allowing complete waiver of interest on crop loans up to 30th June 2006 amounting to Rs. 645 crores. The one-time settlement scheme for long term loans extended by Primary Co-operative and Rural Development Banks and non-farm loans extended by Urban Co-operative Banks has been extended up to 30th June 2006. This Government has thus undertaken a major debt relief package for the benefit of farmers in Tamil Nadu and at the same time ensured the revival of the co-operative credit structure. Irrigation 32. Drought-proofing the farmer from the vagaries of the monsoons has always been a high priority item on the agenda of this Government. All out efforts have been made to ensure efficient management of water resources. After successfully completing the Water Resources Consolidation Project (WRCP) at a cost of Rs. 1083 crores, this Government has proposed a follow on project named ‘Irrigated Agriculture Modernization and Water Resources Management Project’ with an outlay of Rs. 3900 crores for funding to the World Bank. This project is now reaching the final stages of sanction. Under this project, integrated management of water resources will be taken up in all the 17 River Basins in the State. A pilot scheme for rehabilitation works in the Hanumanadhi Sub-Basin has been completed at a total cost of Rs. 53 crores. A total of 619 irrigation schemes have been taken up for implementation at a cost of Rs. 635.68 crores during 2001-2006 with support from NABARD under the Rural Infrastructure Development Fund (RIDF). 33. Our Hon’ble Chief Minister firmly believes in the Inter Linking of Rivers. At every forum, the Hon’ble Chief Minister has insisted on the implementation of the Peninsular River Grid linking the Mahanadhi with the Gundar. It is unfortunate that despite repeated requests from the Hon’ble Chief Minister, the Union Government is yet to sanction the Peninsular River Grid. This House urges an early start to this project. Animal Husbandry 34. This Government has taken effective steps to upgrade the quality of livestock and expand the provision of veterinary services in Tamil Nadu. A massive programme to inoculate major livestock against diseases such as Anthrax, Foot and Mouth Disease, Black Quarter etc., has been taken up with an outlay of Rs. 17.35 crores during 2005-2006. This has prevented the outbreak of livestock related diseases in the State. 35. The Hon’ble Chief Minister’s decision to enhance the procurement price of milk by Re. 1 per litre by milk co-operatives without a corresponding increase in the price paid by consumers has ensured remunerative prices to farmers supplying milk. The total outlay for Animal Husbandry and Dairy Development in the Interim Budget 2006-2007 is Rs.240.34 crores. Fisheries Development and Welfare of the Fishing Community 36. Hon’ble Members will acknowledge that it is only because of the untiring efforts of this Government that the fisheries sector in Tamil Nadu has been revived in so short a time after the devastating Tsunami tragedy. The total outlay for Fisheries in the Interim Budget 2006-2007 is Rs. 91.92 crores. 37. This Government has taken action to upgrade and modernize fishing harbours at Pazhayar, Nagapattinam, Mallipattinam and Chinnamuttom with World Bank assistance with an outlay of Rs. 35.78 crores. Dredging operations are being undertaken at fishing harbours and fish landing centres in Mudasalodai, Pazhayar, Sethubhavachatram, Mallipattinam, Kottaipattinam, Jegathapattinam, Punnakkayal, Thoothukudi and Chinnamuttom at a cost of Rs. 11.47 crores with assistance from the Asian Development Bank (ADB). In addition, modernization and upgradation of fishing harbours at Chennai and Tuticorin are underway with an outlay of Rs. 12.42 crores. This Government has approved the construction of a fishing harbour under public-private partnership at Rajakkamangalamthurai at a cost of Rs. 22 crores and at Muttom at a cost of Rs. 39 crores. While the State Government’s share of Rs. 15.28 crores for construction of a fishing harbour at Thengapattinam has already been sanctioned, the Government of India is urged to accord an early approval for its share. Environment and Forests 38. The total outlay for Environment and Forests in the Interim Budget 2006-2007 is Rs. 270.03 crores. It includes a provision of Rs. 99.64 crores for the Tamil Nadu Afforestation Project – Phase II being implemented at a project cost of Rs. 567 crores with funding assistance from the Japanese Bank of International Co-operation. An estimated 1775 Sq Kms of degraded forests will be reclaimed under this project covering 800 villages during 2005-2013.
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