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Lockdown has crippled TN’s financial reserves: Officials

Expect the worst between August and Dec, warn industry experts

Lockdown has crippled TN’s financial reserves: Officials
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Chennai

The continuous lockdown has crippled the financial reserves of the State and paying salaries to government employees will be a tough task in the coming months, a senior official told DT Next, adding, that signs of the economic crisis are evident within the registration department, local administration and Tasmac liquor outlets, witnessing poor footfall since last month.

The State is also unable to dispatch the special salaries announced by Chief Minister Edappadi K Palaniswami for frontline workers fighting a battle against the dreaded coronavirus. The situation is such that a group of contractors’ consortiums has also asked the State not to float high-cost tenders as contractors are suffering without cash flow. The pending payments of contracting firms are also increasing and the year 2020 will be the worst financial year for the government, the official said, adding that TN’s revenue through government tax collections has fallen by more than 60 per cent.

According to Tasmac insiders, the purpose of opening liquor shops in the State amid the coronavirus threat did not serve the purpose for the government as tipplers could not contribute much to the exchequer due to the financial crisis following the complete lockdown. To generate money in this situation, Tasmac the amid total lockdown, Tasmac, the second highest money generator after State Income Tax Department, opened more than 3,000 outlets barring Chennai and its suburbs from May 7 after more than 40 dry days. Even sales had picked up initially, with more than Rs 100 crore revenue, coming in daily, however, they have dipped to 60% since the first week of June with most shops, especially in southern districts, still wearing a deserted look with just a few takers, sources said.

“During normal days, most consumers had a lot of money to buy liquor, However, with many of them hardly making a living with regard to the lockdown, consumer demand has dipped significantly,” a senior Tasmac official told DT Next.

Not only the State and the Central government, but the corporate and small-scale industries are also choking due to the lockdown, admit industry sources.

“The factual impact of COVID will be known only from August as many units will work on orders under execution in June and July. Unless fresh orders come, August will be the worst month,” KE Raghunathan, Convenor of CIA- Consortium of Indian Associations, said. The CIA expects the brunt will be felt between August and December as demand will be very low. Financial outflow, especially due to moratorium interest payments will be high, said Raghunathan, former National President of All India Manufacturers Organisation.

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