TN finance minister urges Nirmala Sitharaman to relieve state of financial stress, allocate funds for infra projects

CHENNAI: Tamil Nadu finance, human resources and electricity minister Thangam Thennarasu on Saturday urged the Union finance minister Nirmala Sitharaman to make provisions in the upcoming Union budget to sanction Rs 63,246 crore for the Phase II of the Chennai Metro Rail project, as it was originally envisaged as the central sector project.
Speaking at the meeting of state finance ministers with the Union finance minister in New Delhi on Saturday, Thennarasu said the CMRL phase II has been awaiting the approval of the Cabinet Committee on Economic Affairs (CCEA) for the last three years.
"Pending this approval, the entire expenditure is being borne by the state from its own funds. The delay in approval is making a severe impact on our state finances and has slowed the pace of implementation of this project," said the minister.
The Union minister held the meeting to seek suggestions from the states before the budget.
Thennarasu requested Sitharaman to allocate Rs 3,000 crore for the restoration of flood-affected areas in Tamil Nadu as Rs 276 crore released from the National Disaster Fund was inadequate.
He highlighted how various restrictive measures by the Union govt coupled with shifting the burden of central-sponsored schemes on the states had impacted the resources of Tamil Nadu and its ability to fund its development priorities.
The minister said the termination of GST compensation in 2022 had led to revenue shortfall of Rs 20,000 crore every year while the imposition of cesses and surcharges on gross tax revenue had further diverted the funds away from the states.
"The percentage of cesses and surcharges has increased from 10.4% to 20.28% in 10 years. The cesses and surcharges should be merged with basic rates of taxation for the states to get their legitimate share," he said.
The minister said the Union govt's share in centrally sponsored projects should be at least 50%.
The minister said Tamil Nadu's gross state domestic product (GSDP) was always underestimated which had reduced the borrowing capacity by Rs 8,500 crore in the last four years since states' borrowing ceiling was fixed at 3% of their GSDP.
Thennarasu urged the Union finance minister to exclude the loans taken by state govts for taking over losses of DISCOMS, from the calculation of fiscal deficit and borrowing ceilings of the state.
"Currently, to get an additional borrowing space of 0.5% (Rs 30,000 crore), state govt should take over Rs 52,000 crore of discom's losses," he said.
In the railway projects, the minister requested Sitharaman to sanction fourth railway line between Tambaram and Chengalpet, new lines linking Tirupattur with Hosur via Krishnagiri as well as Madurai with Tuticorin via Aruppukottai, a semi-high speed railway corridor to Chennai, Salem and Coimbatore with further extensions.
The minister sought allocation of funds for an elevated road from Tambaram to Chengalpet and from Chengalpet to Tindivanam.