Former Union Finance Minister P Chidambaram has stated that the recently launched Tamil Nadu Assured Pension Scheme (TAPS), while adding to the state's financial load, can be successfully implemented if the government adheres to strict fiscal discipline.
Focus on Boosting State's Own Tax Revenue
In a detailed post on social media platform X, the senior Congress leader emphasized that the Tamil Nadu government must prioritize enhancing its State's Own Tax Revenue (SOTR). He pointed out that the estimated cost of the proposed pension scheme is substantial, likely to consume around 21% to 22% of the SOTR.
"There is no doubt that TAPS will increase the fiscal burden of the state," Chidambaram acknowledged. However, he provided a crucial caveat, adding that "with well-managed fiscal prudence, the pension programme can be implemented without any hassle."
The Path to Implementation: Frugality and Discipline
Outlining a remedy for the anticipated fiscal pressure, Chidambaram suggested a two-pronged approach. The primary focus, besides finding innovative ways to improve tax revenue, must be on rigorous financial management during project execution.
He insisted that all government projects must be completed without exceeding their original budget estimates. "Frugality is essential," he stressed, underlining the need for cost-effective governance. The former minister also called for all government departments to adopt sound financial management as their core guiding principle.
Balancing Welfare with Fiscal Health
Chidambaram's analysis highlights the classic challenge faced by state governments: balancing popular welfare schemes with long-term fiscal sustainability. His comments on Sunday serve as both an endorsement of the pension scheme's intent and a clear warning about its financial implications.
The success of TAPS, according to his assessment, hinges entirely on the state administration's ability to boost its revenue streams while simultaneously enforcing unprecedented budgetary discipline across all its operations. This approach would ensure the scheme's viability without jeopardizing the state's economic health.
