Warming up to Assembly polls, Tamil Nadu on Tuesday presented its interim Budget with no big bang announcements and refraining from imposing of any fresh taxes. The interim Budget had the fiscal deficit being projected at Rs 36,740.11 crore for 2016-17 and revenue deficit estimated at Rs 9,154.78 crore, with a tentative allocation of Rs 60,610 crore. The new government which will be in place by May-end, is expected to present a full Budget.
Presenting the interim Budget in the Assembly, Tamil Nadu finance minister O Pannerselvam said such huge revenue deficit was unavoidable because of state’s falling tax revenue especially the sales tax revenue from petroleum products.
“Further, when the state is implementing many unique schemes such as the green house scheme, free distribution of fan, mixie, grinder and laptop- computers scheme, special public distribution system and social security pension schemes, such revenue deficit is unavoidable”, he said.
The total revenue receipts of the state government including, the central transfers are estimated as Rs 1,52,004.23 crore in 2016-2017. The fiscal deficit to Gross State Domestic Product (GSDP) ratio has been contained to 2.92%, which is well below the limit prescribed by the Fourteenth Finance Commission. “Even though, the state is entitled for budgetary borrowing of Rs 37,782 crore, it has been restricted to Rs 35,129 crore in the interim Budget estimates 2016-2017. This government has been very prudent in handling resources throughout its tenure and has adhered to the norms under fiscal indicators like fiscal deficit and outstanding loan to GSDP,” he said. Total revenue receipts have been estimated at Rs1,52,004.23 crore and total revenue expenditure have been estimated at Rs1,61,159.01 crore in the interim budget.
The finance minister said in view of this, the necessary amendments to Tamil Nadu Fiscal Responsibility Act, 2003 will be taken up when the revised budget estimates for 2016-2017 are presented to legislative assembly. Pannerselvam said the outlay for the Annual Plan 2016-2017 will be finalised after the legislative assembly elections.
However, tentative allocation of Rs 60,610 crore is proposed in the interim budget Estimates 2016-2017. This will ensure that the state achieves overall Plan expenditure of Rs 2,31,498 crore by the end of this Five Year Plan period, thereby exceeding the overall target of Rs 2.11 lakh crore envisaged under the 12th Five Year Plan.
Lamenting on the fall in state’s income, he said the slow rate of tax growth witnessed during the previous two years has been continuing in 2015-2016 also, especially in the commercial taxes.