Tamil Nadu govt adversely hit by demonetisation: Governor

Chennai: It is not just the common man, even the state government has been adversely affected by Prime Minister Narendra Modi’s demonetisation initiative.

The impact of demonetisation has been particularly severe on the resources of states as tax revenue collections slowed down in the last few months. As a mechanism to tide over this crisis, the state has requested the Centre to increase its share on centrally sponsored schemes from 60 per cent to 90 per cent for the next two years. “I hope that this request will also be considered positively,” Governor Ch. Vidyasagar Rao said addressing the Assembly on Monday.

“I believe the Government of India’s decision of demonetisation of the Specified Bank Notes (SBN) will bring a long term dividend to the economy, although its short-term negative impact, particularly on the informal sector, farmers and small traders may last longer than expected,” he said.

On Goods and Services Tax (GST) he said apart from the concerns on the loss of revenue, Tamil Nadu has been raising several significant issues that have a bearing on the interest of the state by taking an active and constructive role in the deliberations of the GST Council. He request the Centre to ensure that the present level of Central transfers after appropriate adjustment for normal growth would be maintained even after the implementation of GST.

Some of the demands put forth by the state government are urging the Centre to take concrete efforts to bring to book, those involved in war crimes and genocide of Tamils in Sri Lanka, constitution of Cauvery Management Board (CMB) and Cauvery Water Regulation Committee (CWRC) without further delay for effective implementation of the final order of the Cauvery Water Disputes Tribunal, extending the Chennai-Visakhapatnam Industrial Corridor to southern TN and including the Madurai-Thoothukudi industrial corridor for developing industrial clusters in the south.