Tamil Nadu: Chennai Metro Phase-2 work slowed down due to delay in approval from the Centre: Thangam Thennarasu

CHENNAI: The delay in approval of the Cabinet Committee on Economic Affairs (CCEA) for implementing the second phase of Chennai Metro Rail has impacted the state’s finances and slowing down the implementation of the project, causing hardships to the people of Chennai, said Finance minister Thangam Thennarasu.

Taking part in the pre-budget meeting of ministers from all states in Delhi hosted by Union Finance Minister Nirmala Sitharaman, Thennarasu said Sitharaman had announced the Chennai Metro Rail Phase – 2 as a central project at a cost of Rs 63,246 crore while presenting the budget during the year 2021-22 and the project was recommended by the Public Investment Board (PIB) on August 17, 2021.

He said the Centre has released a measly Rs 276 crore as against the plea for seeking a disaster relief of around Rs 37,906 crore. “The states agreed to relinquish their fiscal autonomy under Goods and Service Tax (GST) under the expectation of adequate compensation till the new system could generate revenues equivalent to the pre-GST era.

However, the union government has terminated the GST compensation regime on June 30, 2022, resulting in a revenue shortfall of Rs 20,000 crore per annum for the state,” he said, adding the Centre is diverting its revenue collections away from the divisible pool of taxes by imposition of cesses and surcharges as such percentage of gross tax revenue have increased from 10.4% in 2011-12 to 20.28% in 2022-23. He added the net borrowing ceiling of the states is fixed at 3% of GSDP every year by the union government. The GSDP calculated for the state is repeatedly being underestimated, resulting in a loss of borrowing space of around `8,500 crore in the last four years.

Urging the centre to exclude the loans taken by state governments for taking over losses of discoms from the calculation of Fiscal Deficit and Borrowing Ceilings of the State, similar to the UDAY scheme of 2015, he said, “The condition has created a situation, where the state will receive close to Rs 30,000 crore of additional borrowing space till 2024-25, but will have to pay Rs 52,000 crore to its discom. Thus, the state has been forced to incur an additional amount of Rs 22,000 crore and this will be a drain on the resources of the states.