An expert committee has been formulated by the state government of Tamil Nadu to study the effects of the Covid-19 pandemic on the economic status of the state. As per their evaluations, due to the lockdown, economically TN is at present in a ‘bad-shape’.

In the financial year 2020-21, TN will face a declining growth rate leading to a negative rate zone. C Rangarajan, a former governor of Reserve Bank of India (RBI) is the head of this expert committee, which suggested the state government to implement second rounds of cash distributions among several other recommendations. These suggestions were made after analyzing the effects of this global pandemic on various sectors including on the life of common men.

An Urban Employment Guarantee Scheme based on MGNREGA shall be modeled by the state government as suggested by the expert committee. Apart from this, an additional budget allocation worth Rs. 10,000 crores is also mentioned in the committee’s report that was handed over to Edappadi K Palani Swami, the Chief Minister of TN, on Monday, September 21, 2020. This additional budget is meant for capital expenditure and affordable rental housing schemes, keeping in mind the working-class people, especially in towns and cities.

As per one senior official in the committee, these recommendations have been made after focusing and analyzing various sectors hit by the pandemic. It has also predicted some huge implications in different sectors, such as the agriculture sector.

Retail, tourism, and the real estate sectors are considered to be among the worst hit by the lockdown, while the IT and banking sectors were the least impacted by the lockdown.

The official also said that that the report warned that there may be a 13 to 15 % decline in the total output of the manufacturing sector in this financial year due to the severe impacts of lockdown on MSMEs. This sector has suffered losses somewhere around Rs 34,000 to 41,000 crore in this financial year.

Free food-grain distribution is to be carried out for a few months up till November in addition to another round of cash distribution in the state as recommended by the expert committee.

The official further added that the additional budget allocation may be announced soon as it is essential to generate employment and revive growth. An announcement in this regard may be a matter of time as the state can make use of the unused fund-Rs 3,200 crore, meant for the welfare of construction workers. This statement was given by the official regarding the additional budget allocation for working-class people in towns.

The urban employment guarantee scheme and affordable rental housing schemes are among the top-most priority action policies for the government since these require an immediate action plan.