The Hindu Business Line : Buoyant revenues help TN Govt present surplus budget

The Tamil Nadu Government has tabled a revenue surplus budget for 2008-09 supported by buoyant revenues despite an increase in wages, pensions and subsidies.

The Finance Minister, Mr K. Anbazhagan, presenting the budget, said the annual plan outlay was Rs 16,000 crore. The State Government estimates a total revenue of Rs 51,505.62 crore against a revenue expenditure of Rs 51,421.57 crore. This leaves the Government with a revenue surplus of Rs 84.05 crore for 2008-09.

The Government has achieved the target of doing away with the revenue deficit by 2008-09 outlined in the Tamil Nadu Fiscal Responsibility Act, 2003 ahead of schedule. The total capital expenditure is projected at Rs 9,879.35 crore resulting in a fiscal deficit of Rs 9,792.30 crore, which is well within the limit of 3 per cent prescribed under the Act, he said.

However, the revenue surplus is expected to drop in the coming years with the jump in expenses driven by growing wages, pensions and subsidies. Over the next two years the outgo due to salaries, pensions and retirement benefits and subsidies is expected to increase sharply.

According to the revised estimates for 2007-08, salary expenditure is pegged at Rs 13,372.12 crore and are projected to grow to Rs 22,505 crore in 2010-11, pensions and retirement benefits are set to grow from Rs 6,689.18 crore to 10,599.32 crore and subsidies and transfers are expected to grow from 14,114.03 crore to Rs 19,156.16 crore.

The Minister said the revenue expenditure for 2008-09 is estimated at Rs 51,421.57 crore, a 12.75 per cent growth over the revised estimates for 2007-08 mainly due to the filling up of vacant posts in various departments, new schemes and higher expenditure on salaries and pensions due to the Sixth Pay Commission recommendations.

Confident Government

At the press conference following the budget presentation, the Finance Secretary, Mr K. Gnanadesikan, said that the Government was confident on sustaining the fiscal performance despite the increase in costs. The State has managed to report a revenue surplus for the first time in the last few decades.

Tamil Nadu gets among the best rates in the market on its borrowings and the weighted interest on liabilities is among the lowest. These are indicators of the confidence that lenders have in the fiscal discipline in the State, he said.

The State Government expects adequate buoyancy in revenues to stay ahead despite the increase in expenditure. Tamil Nadu is a diversified economy and despite ups and downs in specific areas we can remain confident of a good performance, he said.

State Revenues

Tamil Nadu’s own tax revenue is estimated at Rs 33,156.09 crore with an overall growth of 15 per cent in the coming years. Receipts under commercial taxes for 2008-09 is estimated at Rs 20,797.79 crore, a growth of over 10.8 per cent over the revised estimates for 2007-08. Excise receipts are estimated at Rs 5,329.60 crore, a 15 per cent growth over the revised estimates for 2007-08, which is expected to sustain in the coming years.

Based on the Union Budget, the share of Central taxes is estimated at Rs 9,496.64 crore and is expected to grow at 15 per cent over the next two years.

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