The Tamil Nadu government has also recognised that the MSME sector in the state was the worst-hit by the pandemic and has announced allocations to aid recovery.

Chief Minister Edappadi Palanisamy and Deputy CM O Panneerselvam holding a suitcase with J Jayalalithaas image imprinted on it before presenting the Tamil Nadu Interim Budget 2021-22PTI
news TN Budget 2021 Tuesday, February 23, 2021 - 21:14

The Tamil Nadu Budget document, just based on the fiscal deficit, is enough to worry one about the state's finances. But in an election year, the ruling AIADMK government seems to have brushed aside concerns and increased allocations for key departments.This is despite the fiscal deficit coming in at over Rs 1 lakh crore for the 2020-21 financial year despite the growing fiscal deficit, which stands at over Rs 1 lakh crore for the financial year of 2020-21.

Tamil Nadu’s gross domestic product (GDP) growth, which used to average around 7% annually, is expected to be only 2.02% for the 2020-21 financial year as the pandemic slowed down economic growth thanks to the lockdown. However, important departments including health, agriculture and higher education, saw increased allocations for the 2021-22 financial year.


Following a year that saw the health department working round the clock to battle the COVID-19 pandemic, the allocation has predictably gone up. An allocation of Rs 144 crore has been set aside for Amma Mini Clinics. The mini clinics, which provide basic healthcare facilities such as checking blood pressure, blood oxygen and body temperature, will be set up in densely populated areas across Tamil Nadu.

The Health and Family Welfare Department spent 16.36% more as opposed to the Budget Estimates. While the 2020-21 Budget Estimates had allocated Rs 15,863.37 crore, and the Revised Estimates showed the state government spent Rs 18,458.27 crore.

Allocation has been further stepped up to Rs 19,420.54 crore in the Interim Budget estimates 2021-22, which is an increase of 5.21%.


The Tamil Nadu government is also looking to pump more money into agriculture. The total allocation for the agriculture sector in the Revised Estimates 2020-21 had already been reduced from 11,894.48 crore to Rs 11,109.48 crore.  The allocation increased by 7.8% in the Interim Budget Estimates for 2021-22, with Rs 11,982.71 crore being provided for agriculture.

"The capital outlay on major irrigation, medium irrigation and minor irrigation has been stepped up from Rs 4,882.45 crore in Budget Estimates 2020-21 to Rs 6,389.22 crore in Revised Estimates 2020-21. An allocation of Rs 6,453.17 crore has been provided in the Interim Budget Estimates of 2021-22," states the document.


For the Higher Education department, Rs 5,478.19 crore has been allocated. This is up 8.42%, where Rs 5,052.84 was allocated to the department.

The allocation has not been mentioned for school education. For the most part, schools have remained physically shut in 2021 due to the COVID-19 pandemic and during the last budget, the department received the largest allocation of Rs 34,181.73 crore.

"The gross enrolment ratio in Tamil Nadu is currently at 49% and almost twice the national average. The Gender Parity Index of 0.97 in 2018-19 also shows that equitable access of women has been ensured," the document reads.

Employment and Skill Training

The Tamil Nadu government launched the upgraded portal of the Tamil Nadu Skill Development Corporation (TNSDC) in September 2020 due to an uptick in unemployment due to the pandemic.

According to the government, 1.12 lakh job seekers and 3,360 employers have registered on this portal, and 18,147 job seekers have been placed. An amount of Rs 200 crore has been provisioned for the coming financial year.


Stating the Micro, Small and Medium Enterprises (MSME) sector was the worst-hit during the pandemic, the government said it would be infusing Rs 1,000 crore as fresh additional capital into the Tamilnadu Industrial Investment Corporation. This, it said, was based on the recommendations made by the Dr C Rangarajan Committee which are being acted upon.

Due to the potential in the Handloom, Handicraft, Textiles and Khadi sector, the state government has allocated Rs 1,224.26 crore for the sector. “The scheme of supply of free sarees and dhotis to the poor continues to be implemented to provide continuous employment to the handloom and powerloom weavers in the state,” the document noted.

Social welfare

Noon meal scheme: The Puratchi Thalaivar Dr MGR Noon Meal Scheme continued to be implemented even through the lockdown. For 2021-22, Rs 2,634 crore has been provided for the Integrated Child Development Services (ICDS), an Indian government scheme that focuses on providing food, primary education and healthcare to children under age six and their mother.

Development of Scheduled Caste communities: An amount of Rs 13,967.58 crore has been provided for the 75 Scheduled Caste Special Component Plan and Rs 1,276.24 crore for the Tribal Sub Plan for 2021-22.

Linguistic minorities: The state government recently established the Tamil Nadu Linguistic Minorities Social and Economic Development Corporation (set up under Companies Act) for the welfare of linguistic minorities in the state, with an authorised share capital of Rs 9 crore.

Persons with disabilities: The Tamil Nadu government has allocated Rs 688.48 crore for the welfare of persons with disability. This is supposed to go towards a special project called RIGHTS, which is meant to work towards an integrated approach to prevent and manage disabilities and to ensure greater inclusion, accessibility and opportunities for persons with disabilities.


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