11.6.13

TN's plan outlay


The Union Planning Commission has approved Rs.37,128 crore as plan allocation for Tamil Nadu for 2013-14. The current allocation is 32% more compared to last year’s Rs.28,000 crore.
The outlay for the current year was decided at a meeting between Planning Commission deputy chairman Montek Singh Ahluwalia and chief minister J Jayalalithaa at the Yojana Bhavan, New Delhi on Monday. The central assistance to the state plan will be about Rs.3,165 crore. In addition, Rs.9,000 crore is likely to flow from the Centre to Tamil Nadu through various centrally-sponsored schemes.
Thus, taking all resources, plan assistance from the central government to Tamil Nadu is expected to be over Rs.12,000 crore during 2013-14, said a plan panel release. The panel complimented Tamil Nadu for its tax-GSDP ratio and also for maintaining fiscal discipline as per the Finance Commission recommendations.
Compared to 2011-12 and 2012-13, when the annual allocations were Rs.23,000 crore and Rs.28,000 crore respectively, this year’s allocation is much higher.
“Our plan allocations have been increasing over the years. But as we had a small plan outlay in the initial years, we were not able to increase it by a huge margin suddenly. This year’s increase of 32% is very high and we need to first build our finances before going in for bigger allocation,” said a senior official. “Only in recent years, we have been able to build a surplus in the revenue account and along with borrowings, we finance the plan outlay. In the coming years, we will definitely match the outlays of other big states in the country,” said the official.
“The plan outlay depends basically on the level of development of the state. Tamil Nadu is much better placed than UP or Andhra Pradesh in the areas of education or infrastructure and therefore it is fair for the poorer states to get a bigger outlay,” said Raman Mahadevan, economic and business historian.
Politics too plays a bigger role. The states ruled by parties closer to the central government get a larger pie compared to others. Another important issue deciding the outlay is the state’s ability to mobilise resources. As such, Tamil Nadu’s hands are tied as the state’s citizens are the highest tax payers, said Mahadevan.

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