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Intervening to promote healthy debate and public discourse, Tamil Nadu finance minister P Thiyagarajan, PTR, has promised a “respectful response” to a critique of the budget by inmathi.com. The article talked about how budgetary allocations for some crucial social welfare sectors were either the same as last year or were lower in real terms. The article critiqued the concept that balancing the budget, especially the fiscal deficit, was key to the budget making exercise. It also argued that social sector spending should not be considered unproductive but were actually long-term investments in developing human potential. The article denied economic development and social welfare were opposed to each other.
Venkatesh Athreya, the writer of the article, wrote: “A look at budgetary allocations under various heads tells us a story of minimal pro-people development thrust. Most departmental allocations see marginal increases in nominal terms for 2022-23 as against budget estimates for 2021-22. Some even see nominal reduction. A very few see an increase in nominal allocation that will beat the inflation rate and provide an impetus for growth.”
To this PTR has tweeted that he will write a “respectful response” to the article using data and explaining the budget constraints and the choices he made. PTR’s tweet called the article: “A substantive critique of the Budget I presented last week, as opposed to the inane comments by the usual (political) suspects.”
Inmathi.com looks forward to the response from PTR and appreciates his intervention in favour of healthy public discourse. The times are indeed challenging. And the finance minister, a qualified professional with top level experience in economics and finance, has a tough task on his hand.
To this PTR has tweeted that he will write a “respectful response” to the article using data and explaining the budget constraints and the choices he made.
inmathi.com has done a series of articles on the budget and a Facebook discussion. A pre-budget article by Athreya outlined the tasks. Another by B Chandrasekaran argued for a state economic survey on the lines of the national economic survey so that accurate micro-level economic data is available in the public domain.
A wrap on budget day summarized a Facebook panel discussion on the topic. It pointed out that the budget had projected significant increases in tax collection to pay for the expenses and the increase in revenue expenditure of some Rs 9,000 crore. The budget had projected high economic growth rates that could sustain these levels of tax buoyancy.
It may well be that as the pandemic recedes, there will be a natural surge in economic activity and robust growth will kick in as if to make up for the downturn. There may be a natural uptick in tax collections, too, as a result. An economist who works with the government told inmathi.com that we may see policy announcements from the government soon on boosting tax collection. A revision in property guideline values and registration charges and stamp duty can also be expected.
A critique from a different perspective argued that the budget did not really provide a growth impetus. It said that unless industrial growth and service sector growth are a priority and government programmes specifically target growth, long term economic prosperity will not be possible.
One report on the day of the budget looked at the programmes announced for urban renewal and rebuilding. Another report analyzed the landmark schemes in education, especially the scheme to shepherd girl students coming out of Class 12 to continue into college and obtain degrees through a Rs 1,000 per month assistance. Some six lakh girl students will benefit every year from this scheme, the budget had said.
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