The Hindu Business Line : Turnaround in financial position, says TN Governor

THE Tamil Nadu Government has said that there has been a turnaround in the State's finances with major public utilities restored to financial viability.

In his customary address to the Assembly today, the Governor, Mr P.S. Rammohan Rao, said that the State had made a "miraculous turnaround" to recover from the fiscal crisis it faced in 2001.

Public utilities such as the TNEB and transport corporations have become `financially viable' and over Rs 4,000 crore of unpaid liabilities have been `resolved'.

Last year, in a review of its finances tabled in the Assembly during the monsoon session, it had said that a Medium Term Fiscal Reform programme would be presented with the Budget estimates for 2004-05.

This will outline the plan for correction envisaged under the Fiscal Responsibility Act tabled during the earlier Budget session.

Against the backdrop of the financial crunch, the Government has focused on revenue generation by widening the tax base and introducing new taxes.

Revenue from commercial taxes has been a major growth area along with entry tax that it introduced in 2001.

Infrastructure surcharge, measures to step up arrears collection through conciliation schemes, electricity tax, tariff on power supplied to farm pump sets, hiking motor vehicle tax and levying tax on fuels and telephone rentals were some of the initiatives over the years.

According to the Government, the decline in the TNEB has been arrested and the focus is on augmenting generation capabilities. A roadmap based on the Electricity Act 2003 will be drawn up.

Mr Rao said that the Government that had scaled down its plan to Rs 5,200 crore in 2001 is looking at development schemes that demand a plan outlay of Rs 8,000 crore in 2004-05. The Governor struck another positive note on support from the World Bank, which is now keen on assisting the State in its reforms programme, in addition to project-based assistance.