A top official said the growth rate is “going to be affected badly in this financial year… mostly into a negative zone”. Assessing the impact on various sectors and the life of the common man, the committee headed by former RBI governor C Rangarajan has recommended that the state government carry out a second round of cash distribution, besides making several other suggestions.
A senior official said the Rangarajan-led panel has recommended that the state government roll out an “urban employment guarantee scheme” modelled on MGNREGA. The committee’s report, which was handed over to Chief Minister Edappadi K Palaniswami on Monday, has also recommended an additional budget allocation of Rs 10,000 crore for capital expenditure and an “affordable rental housing scheme” for the working class population in cities and towns.
A senior government official said the committee had assessed the impact of the lockdown on various sectors and predicted huge implications in several sectors, “may be except in the agriculture sector”.
The report has stated that the crisis in the MSME sector has affected the manufacturing sector too. “The report warned that there may be a 13 to 15 % decline in the total output of the manufacturing sector in this financial year due to the severe impacts of lockdown on MSMEs, which has suffered anywhere around Rs 34,000 to 41,000 crore loss in this financial year,” the official said.
According to the report, while services such as banking and IT were minimally affected, real estate, retail and tourism sectors have suffered a huge impact.
The government official said the committee recommended that the state government continue free foodgrain distribution for a few more months beyond November and one more round of cash disbursement. The government has completed one round of cash disbursement of Rs 1,000 among family card holders across the state. It has carried out a second round in Chennai and Madurai as lockdown was extended for a longer period in these places.
The committee told the government to avoid any plans to hike bus fares even as transport corporations are in a crisis.
“Additional budget allocation may be announced soon as it is essential to generate employment and revive growth. An announcement in this regard may be a matter of time as we can make use of the unused fund, Rs 3,200 crore, meant for the welfare of construction workers,” the official said.
The committee has also considered requests for tax concessions from sectors such as animal husbandry, real estate and tourism.
An official said the government may be prioritising the urban employment guarantee scheme and the affordable rental housing scheme as the state’s urban population and working class population require immediate attention.
Besides Rangrarajan, the committee has members from the government as well as industries. While additional Chief Secretary (Finance) S Krishnan serves as coordinator, other senior members include former Chief Secretary N Narayanan, N Srinivasan of India Cements, Venu Srinivasan of TVS Motors and senior economist M Suresh Babu of IIT-Madras.
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