Chennai: Though former RBI Governor C Rangarajan, who led an expert committee that recommended the Tamilnadu government to lift the lockdown completely for the economy to be revived, expressed hope that ‘there are indications that the State’s economy might return to pre-Covid levels in a couple of months’, industry veterans are divided over it.
All India Manufacturers Organisation (AIMO) former national president K E Raghunathan said, “what is the way forward for MSMEs which did not have any revenue for six months? What is the short-term revival plan? What is the deadline for it? What will happen to 30 per cent sick MSMES? What is the immediate solution for those who had lost their jobs? Though longterm vision is acceptable, immediate solutions are the need of the hour”.
Rangarajan, who headed the panel formed by the government to assess the immediate and medium term impact due to Covid-19 pandemic, on Monday said the State has to come out of the lockdown completely for revival of the economy.
Talking to reporters after submitting a 250-page report to Chief Minister Edappadi K Palaniswami at the State Secretariat, he also said there were indications that the state’s economy might return to the pre-Covid levels in the next two months going by the GST revenues, tax on fuel and electricity usage.
Stating that the economic growth has stagnated due to the Covid-19 pandemic, he said only if the State comes out of the lockdown completely, the economic growth would be faster.
“It’s better that we come out of this lockdown completely from the economy point of view”, he said, adding, the government should find other ways to tackle the spread of the pandemic.
The Committee has assessed the economic conditions of the State. One of the assessments was that in 2020-21, the growth rate will be 1.71 per cent, while another assessment shows that there might be a marginal decline, he added.
“We are unsure as to how much the decline will be”, he said.
Asked whether the committee has made any recommendations like distribution of special cash assistance of Rs 1,000 as done during the lockdown, Rangarajan said, “we have written about it and it is for the government to tell”. Noting that expenses on medical and sanitation had gone up during the pandemic and the State needs to look at spending another Rs 5,000 crores for healthcare, Rangarajan said this year, revenues will go down and expenses will go up. “The fiscal deficit will be high and the state’s debt burden will be unavoidable,” he added.
Apart from extending the free rice being distributed to ration card holders for a few months beyond November, another key recommendation was to launch an Urban Employment Guarantee Scheme on lines of MGNREGS in rural areas. “We have written it in detail and hope that the government will consider it”, he added.
In his address, Palaniswami said the government would carefully consider the suggestions made by the Committee to take the state economy on the growth path.