The Hindu Business Line : TN hopeful of covering Rs 590-cr budgetary deficit

THE State Government is relying on increased allocation from the share of Central taxes, better revenue from commercial taxes and cost conservation to make ends meet in 2004-05.

Through these steps the Government is expecting to not only cover the Rs 590-crore budgetary deficit but also the Rs 1,205-crore additional expenditure incurred due to the roll backs announced by it recently.

Replying to the general debate on the Budget on Friday, the Finance Minister, Mr C. Ponnaiyan, said that based on the Union Budget, the State Government expects its share from central taxes to increase by Rs 721.02 crore.

Earlier, the State Government had expected Rs 3,709.82 crore as its share. But following the estimates in the Union Budget this had been revised to Rs 4,430.84 crore.

Further, the State Government was targeting higher revenue from commercial taxes through increased compliance and arrears collection, which will net it an additional Rs 920 crore, and an extra Rs 415 crore from the registration department.

From the sale of housing board lands the Government is expecting an additional Rs 100 crore. A five per cent reduction in expenditure across all the departments would mean a saving of over Rs 400 crore, he said.

Even by a conservative estimate the State Government expects additional revenue of Rs 1,409 crore. It has taken credit for a revenue increase of just Rs 400 crore from commercial taxes and not taken into account the revenue from registration in this calculation.

Though this would leave a gap of about Rs 224 crore, the Government is taking steps to mobilise funds from Urban Finance and Infrastructure Development Corporation Ltd (Tufidco), LIC and GIC. This would not be necessary, Mr Ponnaiyan felt.

The increased revenues would not only cover the budgetary deficit but also the additional expenditure of Rs 1,295 crore due to the restoration of subsidies announced by it, he said.

The Government recently restored free power to farmers, increased coverage under the public distribution system, and announced a series of sops including free bus passes to students.