Tamil Nadu CM M K Stalin.
Credit: PTI File Photo
Chennai: Finding a “common cause” in Kerala Government’s fight towards “preserving fiscal federalism”, Tamil Nadu Chief Minister M K Stalin on Tuesday announced the participation of DMK MPs in a protest led by his Kerala counterpart Pinarayi Vijayan in New Delhi on February 8 against “neglect” of the state by the Union Government.
Stalin, who wrote to Vijayan explaining how the Centre’s arbitrary and discriminatory control over deficit financing has caused a significant dent in mobilisation of funds for state initiatives, also said DMK and other like-minded parties will ensure that the rights of the states, including in finance and administrative matters, is upheld.
“Fascist BJP will never be able to extinguish the flame of state autonomy… Our voice will not rest until we establish cooperative federalism and win State autonomy,” Stalin said in a social media post. Stalin and Vijayan share a good rapport and both leaders have been vociferous in taking on the BJP on issues of federalism, while accusing the Union Government of “neglecting” states ruled by opposition parties.
Stalin also said though the voice of leaders like Vijayan and West Bengal Chief Minister Mamata Banerjee, who are at different ends of the political spectrum, may be different, but the “principle” they stood for was the same.
“DMK MPs, who will wear black shirts and agitate against the Centre’s attitude towards Tamil Nadu, will also participate in the protest to be held by the Kerala Cabinet in Delhi on February 8,” Stalin said.
In his letter to Vijayan, Stalin appreciated the efforts of the Kerala Government in drawing the attention of the Supreme Court to the pressing issue of the Union Government’s attempts to stifle state governments by exercising arbitrary and discriminatory control over their deficit financing.
“Although this has been happening for quite some time, the situation has rapidly deteriorated in the last few years and there is a clear consensus emerging amongst progressive State governments that such indirect control over state finances needs to be done away with,” Stalin told Vijayan.
Contending that the subject of Public Debt for financing public expenditure of states is within the exclusive purview of the State Legislature as per the Constitution of India, Stalin said the Union Government has been misusing its powers under article 293 of the Constitution of India to restrict the borrowing space of the States.
“The prior consent from the Union Government, mandated by this section, has been converted into a restrictive tool to limit deficit financing beyond the limits prescribed by the State FRBMs. As a result, the fundamental principle of fiscal federalism envisioned by the Constitution makers is under grave threat,” he added.
Explaining the problems faced by Tamil Nadu, Stalin said the state has lost Rs 6,000 crore in borrowing space for 2023-24 after the Centre fixed the GSDP growth for calculating the net borrowing ceiling at a mere 8 per cent, despite the state consistently achieving around 15 per cent nominal growth in the last two years.
The mandatory condition of funding gross losses of State DISCOMs under the guidelines for additional borrowing for power sector reforms has forced Tamil Nadu to provide Rs.17,111 crore to TANGEDCO in the current year, Stalin said. He also added that the “intentional delay” in approving Chennai Metro Rail Phase-II project as a Central Sector project has resulted in the entire debt of Rs.33,594 crore for the project being included within the State's net borrowing ceiling.
"I stand in full support of the Government of Kerala's commitment to preserving fiscal federalism. The Government of Tamil Nadu is ready to extend its cooperation in this regard and we look forward to collaborating and synchronising our efforts to address this crucial challenge," Stalin added