Special Status For Madras School Of Economics: Tamil Nadu Gets Long-Pending Tax Policy Institute

On 15 February (Friday), Tamil Nadu Deputy Chief Minister and Finance Minister announced in the State Budget for 2020-21 fiscal that the Madras School of Economics (MSE) will be declared a School of Special Importance.

According to this, Budget provisions have been made for setting up a Centre for Public Finance with the State government providing land, adjacent to MSE’s campus, and a corpus of Rs 5 crore.

The finance centre will give suggestions to the Tamil Nadu government on tax revenues. The Budget provisions were in deference to the request made by MSE Chairman and former RBI Governor C Rangarajan and its director K R Shanmugham for financial support to launch such a centre.

The setting up of the Centre for Public Finance was done as Tamil Nadu, a State that has produced financial experts and given many Finance Ministers to the Centre, did not have such a body when other States such as Kerala and Karnataka had similar ones.

That Tamil Nadu did not have such an institute despite a long-pending demand is surprising, given the fact that it was instrumental in the setting up of the National Institute of Public Finance and Policy, to provide inputs to governments on tax policies, in New Delhi.

One of MSE’s founders and country’s top tax experts, Raja Chelliah, was instrumental in the setting up of the national institute.

MSE was established in 1995 with its other founders being Rangarajan, industrialists A C Muthiah and late A Sivasailam, former chief economic adviser to Government of India Kaushik Basu, erstwhile Planning Commission deputy chairman Montek Singh Ahluwalia, former RBI governor S Venkitaramanan, former ICICI chief N Vaghul, industrialist M V Arunachalam and MSE honorary professor U Shankar.

Though there are allegations of corruption in the institute, most of those who have studied at MSE vouch that it is one of the best institutes in the country to pursue studies in economics, particularly in view of the specialisation it offers.