Jayalalithaa-DMK has led Tamil Nadu into a debt trap

Leader of Opposition in the Tamil Nadu Assembly and AIADMK chief J. Jayalalithaa Monday accused the DMK government of having led the state into a debt trap, and criticised its schemes such as distribution of free colour televisions and gas stoves for burdening the exchequer.

Participating in the debate on the motion of thanks to Governor Surjit Singh Barnala’s address, Jayalalithaa said: “The total debt of the state is around Rs.90,000 crore and the daily interest pay out is around Rs.20 crore. Each citizen has to shoulder a debt burden of Rs.15,000.”

Every new born baby in the state carries a debt burden of Rs.15,000, she said.

She claimed that the government’s debt burden got bloated in the last four years by not developing infrastructure but spending on non-performing items and free distribution of colour televisions, gas stoves and other items, leaving nothing to spend on growth activities.

Referring to the governor’s announcement about the government’s decision to build 2.1 million concrete houses for families living in thatched huts, Jayalalithaa wondered what the source of funds for the scheme will be.

She claimed the state is already suffering under unimaginable debt burden and as per the government’s own estimates, the total cost for the housing scheme will come to around Rs.12,600 crore.

Jayalalithaa alleged that the DMK rule during 1996-2001 left the state with “two cancers – a budget deficit and a debt trap”. The AIADMK government had to bring the state finances back on track, she claimed, adding that in fiscal 2005-06 the state had a revenue surplus of Rs.1,951 crore and a budget deficit of Rs.2,251 crore.

“But in 2009-10 fiscal the revenue deficit is Rs.1,024 crore and the budget deficit is Rs.11,824 crore,” she said.

“The state’s total debt as on March 31, 2001 was Rs.56,094 crore. But in the DMK government’s budget for 2008-09, the total debt is put at Rs.85,394.84 crore.”

She claimed that the state government was only able to borrow money only because the AIADMK rule improved the state’s credit rating, and said she wondered if the state will be able to retain its credit standing.

Citing the 11 percent growth rate of the gross state domestic product during the earlier AIADMK rule, Jayalalithaa said the current growth rate is just around 4 percent.

She also asked the government to reveal the state’s total debt burden, source of funding for the new housing scheme and the reason for fall in the growth rate of the gross state domestic product.

–Indo-Asian News Service

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