The Tamil Nadu government on Saturday set up a high-level committee headed by former Reserve Bank of India governor C Rangarajan to examine fiscal challenges facing the state owing to the COVID-19 pandemic and suggest the way forward to improve its fiscal position.
The committee, which will also consist of Finance Secretary S Krishnan as coordinator, will submit its report to the government within three months, according to a Government Order.
The committee, with 21 members, would assess the overall immediate and medium term impact of the COVID-19 pandemic on different sectors of the state's economy including the impact of lockdown, additional costs and implications due to social distancing and their precautionary measures. Also, it would assess the opportunities and threats in the short and medium term, suggest measures required to help the important sectors of the economy to overcome the impact of the virus pandemic.
Apart from identifying specific reform measures to be taken by the state government to support and promote the growth of the important sectors of the economy, the committee would assess the impact of the crisis on state government's fiscal situation and way forward to improve the fiscal position, including increasing the tax; GDP ratio and diversifying revenue sources and reprioritising expenditure.
The committee will also identify fiscal issues and economy protection measures the state should take up with the Union government for necessary action and possible sources of financing and funding for different sectors including infrastructure projects, small business and other enterprises.
On February 20, 2020, Deputy Chief Minister O Paneerselvam who holds the finance portfolio, announced that an expert committee would be constituted to improve the tax: GSDP ratio of Tamil Nadu.
Now taking into account the COVID-19 pandemic and lockdown which has posed serious economic and fiscal challenges the role of the committee has been redefined.