CHENNAI: Tamil Nadu minister for finance and human resources PTR Palanivel Thiagarajan on Wednesday informed the state assembly that the government has spent Rs 20,000 crore to ramp up medical infrastructure and procure medicines for Covid-19 pandemic.
“The fund spent for the Covid-19 pandemic was one per cent of the state’s GDP (estimated at Rs 20 lakh crore).
We did not expect the second wave of the pandemic to be so intense.
The government is utilising its resources mainly to tackle the pandemic,” he said in response to AIADMK MLA from Kalasapakkam assembly segment Agri S S Krishnamoorthy, who questioned the DMK for not fulfilling its poll promise of reducing fuel price, during the debate on the motion of thanks to the governor’s speech.
Reiterating that the DMK government would keep up its poll promise of reducing the fuel price, the finance minister Thiagarajan said the people of the state are well aware of the present situation.
“At this juncture, reducing fuel price is not feasible, as the situation is worse than what was expected,” he said.
He recalled that it was during the DMK regime under M Karunanidhi, between 2001 and 2006, that the VAT on fuel was reduced thrice, though crude oil had then cost $100 to $130 per barrel.
The Union government, citing the pandemic, had converted 96% of the excise duty into cess and kept the Rs 50,000 crore to itself.
Unlike excise duty, cess need not be shared with the states.
“This has deprived the state of its funds.
It received Rs 800 crore, as against Rs 1,300 crore due from the Centre.
In this present scenario, reducing the fuel price will be like supporting the wrong policies of the Union government.
It will encourage the Union government to continue its wrong policies,” the minister said.
Intervening th BJP floor leader Nainar Nagendran, who defended the Centre on devolution of funds to states, the minister said that when BJP came to power, the excise duty on petroleum products was 90% and cess was 10%.
However, the BJP government had reduced the excise duty to 44% and increased cess to 56%.
“From February 2021, citing the pandemic, the Union government has increased the cess to 96%.
The remaining 4% excise duty has been shared among the 31 states under devolution of funds.
As a result, states are deprived of the funds,” he said.