Fiscal deficit through the roof, but no new taxes: Highlights of the Tamil Nadu Budget

Tamil Nadu Finance Minister D Jayakumar presented his maiden budget in the state Assembly on Thursday, and the state of TN’s finances continued to be alarming. No new taxes have been introduced this budget despite the state’s mounting expenditure owing to its freebies and welfare schemes, while tax collection continues to remain weak. The budget showed the state of Tamil Nadu’s finances with the fiscal deficit for 2016-17 at a whopping Rs 61,341 crore, or 4.58% of the GSDP. This has overshot the 3% limit prescribed by the Fiscal Responsibility and Budget Management Act. Jayakumar blamed the poor state of TN’s finances on TANGEDCO’s debts. He said: “In 2016-2017, the government has taken over the debt of TANGEDCO to the tune of Rs 22,815 crore, which has increased the Fiscal Deficit beyond the Tamil Nadu Fiscal Responsibility Act norm of 3% of GSDP. However, the government of India has given specific authorisation to exceed the limit to the extent of debt takeover from TANGEDCO and allowed the State to borrow beyond 3% to absorb the burden of this debt. In view of this, a bill to amend the Tamil Nadu Fiscal Responsibility Act, 2003 will be introduced in this august House in this session.” The Finance Minister, however, said that the fiscal deficit would be brought down to 2.79% of GSDP in 2017-18, keeping it within the prescribed norms. Opening his budget speech by invoking late Chief Minister Jayalalithaa, Jayakumar said, “The five priority missions formulated by the government headed by our beloved leader Amma in its last budget speech, namely, water resource management, poverty reduction, housing for the poor, skill building and clean Tamil Nadu campaign along with eleven focus areas of development will continue to form the bedrock of this government’s strategy for development.” Highlights of the budget: Total Revenue Receipts for 2017-18–  Rs 1,59,363 crore Revenue Expenditure for 2017-18 – Rs 1,75, 293 crore Revenue Deficit for 2017-18 – Rs 15,930 crore Fiscal Deficit for 2016-17 – Rs 61,341 crore or 4.58% of GSDP Fiscal Deficit for 2017-18 – Rs 41,977 crore or 2.79% of GSDP School education - Rs 26,393 crore Electricity - Rs 16,998 crore Police – Rs 6,483 crore Drinking water supply - Rs 610 crore New deep borewells to be sunk, existing ones to be rejuvenated Temporary accommodation on rent for migrant labourers Smart canes for 10000 visually impaired persons Diesel tax exemption for fishermen hiked from 15000 litres to 18000 a boat Cooperative to extend total fresh crop loans of Rs 7000 crore ‘Post Vardah Greening Project’ launched for restoring greenery at cost of Rs 13 crore in Chennai, Tiruvallur, and Kancheepuram Rs 272 crore allocated for eradication of poverty in cities in Tamil Nadu 115 km of State Highways and 107 km of Major District Roads will be widened Rs 160 crore The single window system clearance in the Tamil Nadu Industries Guidance and Export Promotion Bureau will go online. Global Investors Meet will be held during 2017-2018 and Rs 75 crore has been earmarked Aerospace Park in Kancheepuram to be built at Rs.350 crore Medi Park in Kancheepuram to be built at Rs 130 crore 30 new Primary Health Centres (PHCs) to be built, 12 PHCs to be upgraded at Rs 43.76 crore In order to make medicines affordable, the use of generic drugs will be promoted and Tamil Nadu Medical Services Corporation will set up 10 sales outlets to sell generic medicines Rs 48 crore for Tamil Development. Tamil Cultural Heritage Museum to be built at World Tamil Sangam, Madurai