TN Govt expects fiscal deficit to GSDP ratio to be at 2.71 in FY16

The Government of Tamil Nadu today put forward a medium term fiscal plan for a period between 2013 and 2016, expecting the fiscal deficit to GSDP ratio to be at 2.71 in 2015-16, as compared to the estimated 2.84 for the fiscal year 2013-14.

Delivering his budget speech in the Tamil Nadu Legislative Assembly today, Minister for Finance O Panneerselvam said that “…, in spite of pressures for vital expenditure and serious resource constraints, the Chief Minister has decided that, against the backdrop of the slow growth of the Indian economy in general and its possible repercussions on the State’s economy in particular, no new tax will be imposed, nor will any existing tax rate be hiked in this Budget.”

During 2013-14, the government is projecting a revenue surplus of Rs 664.06 crore and a fiscal deficit of Rs 22,938.57 crore. The fiscal deficit will be 2.84% of the GSDP, even as the stipulated norm for fiscal deficit to GSDP is of 3%.

For the fiscal year 2012-13, the revenue surplus was projected at Rs 2,376 crore. However, owing to increased expenditure commitments, especially because of the efforts of this Government to revive the financial health of TANGEDCO and the substantial reduction in receipts from the Government of India, the revised estimate of revenue surplus is reduced to Rs 451.52 crore. The fiscal deficit was restricted to Rs 19,889.31 crore, around 2.88% of the GSDP, said the Finance Minister.

The government has set an overall target for the State’s own taxes at Rs 86,065.4 crore, with a projected growth rate of 17% over the revised estimates for 2012-13. The estimates for commercial taxes, excise duty and motor vehicles taxes are Rs 56,025.24 crore, R s 14,469.87 crore and Rs 4,881.15 crore. The public debt, was restricted to Rs 15,675 crore in 2012-13, even thought the State has an eligibility to raise net public borrowing to Rs 20,716 crore in 2012-13.

“The net borrowing is lower than the projected capital expenditure, showing that this entire borrowing is going to finance capital expenditure alone,” said the Minister. The government proposes a net borrowing of Rs 21,142 crore to finance its capital works during 2013-14 as against the approved limit of Rs 24,263 crore.

Around Rs 17,220.89 crore has been kept as overall allocation for the primary sector in the budget estimates 2013-14. The allocation for agriculture has been increased to Rs 5,189.15 crore during 2013-14, over the current year allocation of Rs 4,829.93 crore which is the highest ever allocation for the sector, says the minister.

The crop loan target under the co-operative sector would be stepped up from the present level of Rs 4,000 crore to Rs 4,500 crore in the next fiscal year. During 2013-14, the government allocated Rs 250 crore to distribute around 12,000 milch cows and six lakh sheep and goats to 1.5 lakh poor women.