A few weeks ago, ahead of the 2021 polls, the two Dravidian parties in Tamil Nadu were in the race of promising freebies to the voters. While the leader of the opposition, MK Stalin promised 1,000 rupees to every woman head of the family and a plethora of other allowances, the EPS led government said that it has already spent billions of dollars on welfare schemes and promised even more if elected back to power.
However, now as many states in the country have started offering free vaccines to their citizens, the Tamil Nadu government has expressed its inability to offer free vaccines and has urged the Union government to bear the cost of vaccination.
“It is also iniquitous since the State governments have considerably less fiscal resources at their demand than the Central government. Further, since budgetary provision of Rs.35,000 crore has been made in the Budget Estimates for 2021-22 for the COVID-19 vaccination programme, states have a legitimate expectation that the government of India would supply the COVID-19 in phase 3. In these circumstances, I request the government of India to kindly procure and supply the entire required quantity of vaccine for administering all groups including those in the age group of 18-45,” said E Palaniswami, the CM of Tamil Nadu.
Moreover, he also questioned the different price mechanism of the vaccines – even after the explanation came from the Serum Institute of India. He said, “Such a differential price mechanism is inherently unfair since it places a higher financial burden on States. It is also iniquitous since the State governments have considerably less fiscal resources at their command than the Central government.”
The public finance of Tamil Nadu reportedly is so poor that it cannot provide free vaccines to the people despite being one of the richest states of the country while poor states like Uttar Pradesh and Bihar are capable of giving free vaccines to everyone above the age of 18.
A few months ago, ahead of the state budget, Deputy Chief Minister O Panneerselvam expressed his inability to control the fiscal deficit of the state. “With the Covid-19 pandemic, the State Own Tax Revenue (SOTR) collapsed in the first four months of the current financial year due to the lockdown and the additional time provided for remittance of tax dues,” he said during the budget session of the Tamil Nadu assembly. “It is completely unavoidable that the Government had to resort to borrowings resulting in a higher fiscal deficit,” he added.
Tamil Nadu’s debt burden would only increase if the Stalin led DMK comes to power on May 2 because it is even more radical than AIADMK in the distribution of freebies. Last year, the total capital expenditure (money spent on asset creation) was less than 50,000 crore rupees and if this scheme is implemented, it would further be reduced to around 30,000 crore rupees.
A few weeks ago, the data on Gross State Domestic Product was released and as per the data, Uttar Pradesh has taken over Tamil Nadu as the second-largest economy in the country. If Tamil Nadu continues to spend on only welfare and not asset creation, the states like Karnataka and Gujarat would also take over the state and leaders like Stalin would be responsible for the economic decline of one of the richest states of the country.
The indiscriminate spending on freebies leaves little space for the allocation of funds for emergency provisions such as vaccination, and then states like Tamil Nadu have no other option than to seek help from the Union government.