The Tamil Nadu’s Dravida Munnetra Kazhagam government, which presented the 2024-25 budget on Monday themed on the seven ‘grand Tamil dreams’ including social justice and women’s welfare, attempted to contain the state’s fiscal deficit and revenue deficit within prudential limits, despite revenue constraints.
The Budget unveiled a new scheme the “Kalaignarin Kanavu Illam,” a housing scheme named after the late DMK patriarch and former Chief Minister M Karunanidhi. As per the scheme, 0.8 million concrete houses will be constructed across the state to make TN ‘hut-free’ by 2030. The government has earmarked Rs 3,500 crore for the scheme.
The Budget is targeted at achieving the seven grand ‘Tamil dream’: social justice, welfare of the marginalised, transforming Tamil youth as global achievers, knowledge-based economy, sustainable future and Tamil language and culture.
Tamil Nadu’s revenue deficit will decline marginally to 1.56% in FY25 from 1.65% in FY24RE (1.33% in FY24BE). It was 1.53% in FY23. The state’s fiscal deficit was retained at almost the same level at 3.44% in FY25 from 3.45% in FY24RE. It was 3.46% in FY23.
The Fifteenth Finance Commission has permitted the states to maintain a fiscal deficit to GSDP of 3% in 2024-25. In addition, it has provided an additional space of 0.5% of GSDP power sector reforms
“In line with the recommendations of the 15th Finance Commission, the government is following the glide path of fiscal consolidation and has reduced it from 3.46% in 2022-23 to 3.45% in 2023-24 to 3.44% in 2024-25,” Tamil Nadu Finance Minister Thangam Thennarasu said.
“This has been achieved despite the impact of disasters and after an unprecedented allocation to TANGEDCO (Tamil Nadu Generation and Distribution Corporation) from within the budgetary resources.”
Thennarasu alleged that the Union government ‘continues to stifle our state by exercising arbitrary and discriminatory control over our finances.’ “The imposition of stringent conditions on the borrowing ceiling by the Union Government has unduly restricted the ability of the State to raise resources to fund its development initiatives,” he said.
The total revenue receipts of the state government, including the Central transfers, are estimated to be Rs 2.99 trillion 2024-25, up 10% on year over the revised estimates of 2023-24.
The southern state’s revenue expenditure is estimated to rise by about 10% on year to Rs 3.48 trillion while capital expenditure is by 20% to Rs 0.59 trillion (Rs 59,414 crore).
The debt and liabilities of the state are estimated to hover around 28% of GSDP in FY25.
