Southern States - Tamil Nadu   

Crop failure may tell on economy performance

By V. Jayanth

CHENNAI Feb. 19. Despite an encouraging double digit growth in sales tax till December this fiscal, the State Government is concerned at `non-performance' in agriculture, one of the worst-ever droughts in recent times and the imminent switch Value-Added Tax along with the phasing out of Central States Tax.

Of equal concern to authorities is a projected `slump' in rural economy following the failure or loss of three successive crops and the bleak prospects for the next kuruvai crop as well.

According to current trends, a 12-15 per cent growth in ST is possible during the current fiscal and the budget projections on revenue seem to be "well on track". In addition to the tax collections, the inflows by way of ``Additional Revenue Mobilisation'' are stated to be "on course".

The 2002-03 budget projected a deficit of Rs. 1,330.24 crores but went in for an additional resource mobilisation of Rs. 690 crores, leaving an uncovered deficit of Rs. 640 crores. The objective now is to ensure that this gap does not widen. The failure of successive crops and the unprecedented drought conditions in several parts have left the authorities worried. The impact is expected to show up in the economic performance and indicators of 2002-03, more than of the current year, though the signs are already there.

There is bound to be a negative growth this year.

This at a time when the Government wants to shore up the agriculture sector and ensure at least a four per cent growth.

On the plus side, the Government managed to contain, to some extent, the food subsidy bill this year.

Apart from the differential pricing of public distribution system rice, which has resulted in considerable savings in subsidy, little or no procurement during the season has helped. The State now makes do with rice from the Central pool, coming at a price of Rs. 5.65 a kg, whereas the cost of rice procured from farmers would have worked out to almost Rs. 12, with overheads.

Official sources said the revenue buoyancy this year was on expected lines and provided much comfort, as last year was a "particularly bad fiscal". There was hardly a three-five per cent growth in revenue collection.

Another redeeming feature, the sources explained, was that no major shortfall in the Central devolution was expected this year, compared to a whopping Rs. 540-crore shortfall last year.

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