TN govt seeks Rs 4,000 cr spl central assistance to tackle coronavirus

The Tamil Nadu government on Wednesday sought a special assistance of Rs 4,000 crore from the Centre to implement measures to tackle COVID-19, saying the state's revenues have "also taken a hit" in this "unprecedented situation." Therefore, as a one-time measure, the fiscal deficit limit of three per cent of Gross State Domestic Product may be relaxed for the financial years 2019-20 and 2020-21, Chief Minister K Palaniswami said in a letter to Prime Minister Narendra Modi. He said that of the Rs 4,000 crore, Rs 3,000 crore will be required for the health sector at "this crucial juncture". Detailing the various steps taken by his government in the wake of the COVID-19 outbreak, the chief minister told Modi that more resources are needed to "face the projected number of cases effectively".

Palaniswami recalled that he had already announced measures to strengthen the health infrastructure in Tamil Nadu, which includes earmarking 10,000 beds in isolation wards both in government and private hospitals to scale up procurement of requisite medical equipment, including ventilators, hospital beds, personal protection equipment and drugs and medicines and deployment of health human resources. He said Tamil Nadu is "vulnerable" to this virus because of the large number of international passengers who transit through the four international airports and an equal number of major ports in the state. Tamil Nadu also adjoins states "where the outbreak has been initially more severe", Palaniswami said.

He said that while immediate measures have been taken, there was a need to prepare for a significantly higher case load in the coming weeks and months. Substantially more resources are needed to face the projected number of cases effectively, including through the establishment of isolation hospitals and quarantine centres among others, the chief minister said. Private hospitals will also need to be equipped and their services utilised to treat patients free of cost, he said "Extensive sanitation and disinfection measures would need to be undertaken. Hence, I request an allotment of Rs 3,000 crore for the augmentation and strengthening of the health infrastructure and for essential equipment, medicines and for preventive public health measures at this crucial juncture," he said.

Further, the 21-day lockdown announced by Modi on Tuesday "will add to the huge strain that the economy of the state has already been put under", he said recalling his government's Rs 3,280 crore relief package that includes supply of free ration commodities and Rs 1,000 per family for loss of wages. He sought Rs 500 crore each towards assisting workers dependent on MGNREGA wages, besides providing assistance to unorganised sector workers in the form of a special wage loss and relief package.

"Keeping in view the urgency of the tasks on hand to meet the challenges of tackling COVID-19 pandemic and to support the government of Tamil Nadu financially, as it takes massive preventive operations and relieve the considerable hardship placed on the poor, I request you to urgently consider my request for special assistance of Rs 4,000 crore and related financial relief measures expeditiously," Palaniswami said. With a need to ensure supply of PDS commodities for at least two more months, he sought release of foodgrains from the Food Corporation of India at the below poverty ratio rates for the entire allotment.

In the letter, he said a large number of industries and businesses, especially MSMEs, face "considerable" loss of production and of markets and cash flows are heavily constrained. This makes it very difficult for them to meet their tax, statutory dues and bank loan interest payment and loan repayment obligations, the chief minister said. "I request that as a special measure, bank loan repayments can be rescheduled at least for two quarters, without treating them as NPAs. "Interest and penalties can be waived for the two quarters. The working capital loans to all industries and businesses can be enhanced by 50 per cent without seeking any additional collateral from the enterprises," he suggested.

In this "unprecedented situation, the government’s revenues have also taken a hit" and the expenditure needs have risen considerably, he said. "Further, additional borrowing of 33 per cent above the level permitted for the fiscal year 2019-20 may be allowed for 2020-21 to enable the states to meet the additional expenditure requirements," he said. In a televised address, the chief minister said it was imperative to follow the 21-day lockdown as stipulated by the Centre.

"Government initiative alone is not enough and the cooperation of each one of you is very,very essential," he said. "The 21-day curfew is not a holiday, but a government order intended to protect you and your family." Palaniswami exhorted people to not venture out of their homes considering the seriousness of the coronavirus.

He said if people go out of their homes for essential needs, they should follow social distancing. Foreign returnees should voluntarily home quarantine themselves, and if they do not do so their neighbours can alert authorities, he said. "Quarantine is to protect you, your family, the community and the country... every family is important for the government" and action will be taken against those violating curbs and spreading rumours, he said.

The chief minister outlined the Rs 3,780 crore relief package he announced on Tuesday and measures like availability of quality food in state-run Amma Canteens to see that people were not put to any hardship. Tamil Nadu has reported a total of 23 COVID19 cases so far, including one death. A 45 year-old man who tested positive for the virus earlier has been discharged after treatment.