Despite a huge revenue deficit, the Tamil Nadu government has announced a slew of schemes to help promote equitable and socio-economic development in its budget for 2017-18.
Despite a huge revenue deficit, the Tamil Nadu government has announced a slew of schemes to help promote equitable and socio-economic development in its budget for 2017-18. The state has decided not to introduce any new tax. In his maiden budget presented on Thursday, state finance minister D Jayakumar announced a sum of R150 crore towards the Tamil Nadu Skill Development Mission to train 1 lakh youth, establishment of India International Skill Centres at three cities, a sum of R369 crore to bring an additional 1 lakh acres under a micro-irrigation system for sugarcane production and 2,000 farmer producer groups for better credit mobilisation and adoption of newer technologies.
The state finance minister also announced the allocation of fresh crop loans to the tune of R7,000 crore for cooperative farmers. A special project to develop product-specific integrated MSME clusters in four locations, namely a textile cluster each in Kancheepuram and Karur District, a food products cluster in Dharmapuri and a seafood cluster in Ramanathapuram with a JICA-assisted programme, doubling of allocation of capital subsidy to MSME units to R160 crore.
As part of the party’s electoral promise, Jayakumar also doled out R200 crore to help 1 lakh women purchase two-wheelers (50% subsidy). He also announced construction of 1.76 lakh rural houses under the Pradhan Mantri Awas Yojana at a cost of R420 crore.
An amount of R2,000 crore will be allocated for the Tamil Nadu Infrastructure Development Fund to develop infrastructure in a big way, he said. In his budget presentation, Jayakumar said the huge revenue deficit of R15,930 crore has been due to interest payment commitment under the central government’s UDAY scheme, giving free power of up to 100 units to all households.
In addition to this, the state government will have to absorb an expected revenue loss of R2,100 crore due to the closure of 1,000 TASMAC (liquor) shops, as well a waiver for cooperative farmers’ loans, he said.
Following these, the total revenue receipts for 2017-18 has been pegged at R159,363 crore, while the revenue expenditure has been put higher at R175,293 crore, leaving a revenue deficit of R15,930 crore, he added.
The fiscal deficit for 2017-18 has been projected at R41,977 crore, which is about 2.79% of GSDP in the budget estimates for 2017-2018. This will be within the norms prescribed. It is estimated that R41,965 crore would be raised as net borrowings, as against the permissible limit of R45,119 crore.
The net outstanding debt at the end of March 31, 2018 will be R314,366 crore, including the debt taken over from TANGEDCO and the debt-GSDP ratio will be 20.90% which is well below the debt-GSDP norm of 25%, he said.
In 2016-17, the state government had taken over state-run power utility TANGEDCO’s R22,815-crore debt, which has increased the fiscal deficit beyond the Tamil Nadu Fiscal Responsibility Act norm of 3% to 4.5% of gross state domestic product (GSD), Jayakumar said. In 2016-2017, the fiscal deficit will be R61,341 crore.