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CHENNAI, Oct. 1

THE Tamil Nadu Finance Minister, Mr C. Ponnaiyan, has said that the State Government has not declared some of the worst drought hit districts as "drought affected" because it would have adverse impact on several areas including waiver of collection of land revenue.

The panchayats, which are suffering from lack of funds, would also lose revenue. "We have also explained our position to the Centre," he said. "The State is experiencing the worst drought in 37 years. Water level in some of the districts is below 800-900 feet," he added.

Speaking at a function organised by the Madras Chamber of Commerce and Industry here on Monday, Mr Ponnaiyan blamed the successive governments in the Centre for the "negative approach towards agricultural economy". The severe drought in the southern districts, which in turn led to poor agricultural production in the State, could have been avoided had the Centre nationalised the country's river waters long ago. "It is high time that the Centre took up the nationalisation of the rivers waters immediately and also the Peninsula grid scheme," he said.

According to Mr Ponnaiyan, the Centre had categorised Uttar Pradesh, Haryana and Punjab as drought-affected States. The irony is that while Uttar Pradesh's rural unemployment was about four per cent, Tamil Nadu's was 22 per cent. While UP has been categorised as a backward State, Tamil Nadu was considered a forward State because of the latter's good infrastructure including power, roads and measures like population control. "The State has lost about Rs 1,100 crore from the Government of India's allocation of funds," he said.

"We are not able to mobilise funds to take up infrastructure projects. The State spends 94 per cent of its revenue on salaries and pension. The State does not have enough funds to take up capital expenditure," he added. He urged the private sector to take up more projects in the rural areas of the State.

According to Mr Ponnaiyan, the banking policy should be totally changed. The industry must fight against the negative approach of financial institutions so that funds are provided based on the viability of the project, he said.

The industrialists should take up projects which are employment-oriented, and which should be towards agriculture — sugarcane was a good example, he said.

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