Karunanidhi refutes Jayalalithaa’s charges of ‘leading state into debt trap’

Tamil Nadu Chief Minister M. Karunanidhi on Tuesday refuted charges made by Leader of Opposition J. Jayalalithaa that his party had led the state into a debt trap. He said his government was mobilizing resources through loans only to implement welfare schemes and build infrastructure.

Participating in the debate on the motion of thanks to the Governor’s address to the House, Ms. Jayalailthaa contended on Monday that due to the wrong economic policies of the government, there was a setback to the State’s revenue and a huge shortfall. The problems of unemployment and price rise were growing. She wondered whether the present government would be able to maintain the credit rating of the State, going by its expenditure pattern.

Karunanidhi said on Tuesday in the House: "Jayalalithaa after asking the questions walked out of the House without waiting for the answers. Nevertheless the answers are here."

He said the total debt of Tamil Nadu as on March 31, 2009 is Rs.74,858 crore and the funds for converting 2.1 million mud houses with thatched roofs into concrete houses would be met from the state's annual plan.

"The expenditure on the housing scheme is a plan expenditure. The total cost will be Rs.12,600 crore. As the 2.1 million houses will be built over a period of six years the annual expenditure will be Rs.2,100 crore. In the year 2010-11 300,000 houses will be built and Rs.1,800 crore will be allocated for it at Rs.60,000 per house," Karunanidhi said.

In a letter to the party workers that was released to the media late Tuesday, Karunanidhi said: "During the DMK's rule in 1996-2001 the debt was Rs.28,685 crore. This went up to Rs.57,457 crore during the five-year AIADMK rule in 2001-2006, twice that of what the DMK government had left.

“The DMK government has been managing the deficit at three percent of the gross state domestic product (GSDP).The state's debt grew to Rs.60,170 crore in fiscal 2007, to Rs.64,655 crore the next year and Rs.74,858 crore in 2009.”

He said the state government was following the central government's permission to have the fiscal deficit at four per cent of the GSDP.

He said the government announced the two acre free land scheme to landless farmers based on the AIADMK's budget statement of Fiscal Year 2002.

To Jayalalithaa's question on the reasons for the fall in growth, Karunanidhi said: "During DMK's first year in power in 2006-07, the economic growth was 11.29 per cent. In 2008-09 the growth rate is 4.55 per cent."

Citing neighbouring states logging similar growth rates in 2009, he said Andhra Pradesh grew at 5.53 percent while it was 5.08 percent for Karnataka. The global economic recession was the main reason for the fall in the state's growth rate, Karunanidhi said.

- Asian Tribune -