State's financial burden may increase by Rs 50,000 crore

Tamil Nadu gover n ment's financial bur den may go up by an additional `50,000 crore per annum if the freebies in AIADMK's manifesto are to be implemented.
First and foremost is state government employees' pay revision. According to state finance department, the salary and pension expenditure is likely to go up by Rs 15,000 crore per year as and when the government decides to bring in a pay parity with central government employees.All parties have promised this in their manifestoes.
Waiver of farm loans and providing interest free loans to farmers for the next five years will also be a big drain on the exchequer. “The government's promise to give interest free farm loans to marginal, small and medium farmers will cost `9,000 crore in the first year. This is one of the biggest expenditures in the manifesto. The impact of providing 50% subsidy to women to buy scooters cannot be gauged now as one has to see how many people will come forward to contribute the balance 50%,“ said an economist.
Similarly, free power up to 100 units for domestic consumers will cost Tangedco around `1,690 crore annually . “The government is already compensating Tangedco for providing free power to farmers,“ he said.
The manifesto promises to continue the green house scheme for the rural poor and laptops for students.
“All new welfare measures will cost at least Rs 50,000 crore additionally. This additional expenditure will come at a time the government's tax revenue falls short of the target. These measures could affect our fiscal management badly,“ said the economist.
In the coming years, Tamil Nadu will also have to implement goods and service tax (GST). Being a manufacturing state, the tax revenue is likely to come down in the initial years. This will be an additional burden on the state's finances.