Tamil Nadu seeks Rs 4,000-cr special aid from Centre to fight Covid-19, lockdown impac

FE Bureau

The Tamil Nadu government on Wednesday sought a special assistance of Rs 4,000 crore and a slew of other financial support from the Centre to help the state fight the Covid-19 pendamic and the economic impact of the lockdown announced for three weeks.

In a letter to prime minister Narendra Modi, state chief minister Edappadi K Palaniswami pointed out that the lockdown for 21 days will add to the huge strain on the economy of the state. He said in a bid to relieve hardship of the workers dependent on MGNREGA wages, at least Rs 500 crore be released as a special allocation to pay 50% wages for the wage employment lost in the months of March, April and May, 2020.

Tamil Nadu had announced a relief package of Rs 3,280 crore for the state, including supply of free ration commodities for the month of April and Rs 1,000 per family for loss of wages, in the aftermath of the proposed lockdown till March 31, 2020. Given the fact that now lockdown will be extended by two more weeks, the impact on the poorest and daily wage workers will be the most as they face an immediate loss of livelihood, the state government has sought relief package and other measures from the Centre.

On the unorganised labour front, Tamil Nadu has approximately 12 lakh construction workers and 15 lakh workers in the other unorganised sector, who would be facing undue hardship during this lockdown period. "I have announced a special package of `1,000 along with 15 kg of rice, and 1 kg each of pulse and oil supplied free of cost. However, we would need more support for the wage loss which is now likely for a longer period of at least two more weeks.

I request you to allot a sum of Rs 500 crore to provide a special wage loss and relief package for unorganised sector workers in the state to help them overcome their immediate hardships," he said in the letter. The chief minister said that the supply of PDS commodities to the members of the public in general also needs to be continued for two more months at least. For the purpose, there is the need that the stocks of food grains available with FCI are released to Tamil Nadu at the BPL rates to enable supply food and essential articles to all ration card holders during the distress period.

He said, in addition, a large number of industries and businesses, especially MSMEs face considerable loss of production and of markets. Cash flows are heavily constrained, making it very difficult for them to meet their tax, statutory dues payment, and bank loan interest payment and loan repayment obligations. Tamil Nadu government has demanded as a special measure, bank loan repayments can be rescheduled at least for two quarters, without treating them as NPAs. Interest and penalties can be waived for the two quarters. The working capital loans to all industries and businesses can be enhanced by 50% without seeking any additional collateral from the enterprises, the chief minister said.

"In this unprecedented situation, government's revenues have also taken a hit and the expenditure needs have risen considerably. Hence, as a one-time measure, I request that the fiscal deficit limits of 3% of GSDP may be relaxed for the financial years 2019-20 and 2020-21. Further, additional borrowing of 33% above the level permitted for the fiscal year 2019-20 may be allowed for 2020-21 to enable the states to meet the additional expenditure requirements," he said.