No new schemes in TN interim Budget

A slowdown in Tamil Nadu’s tax revenue in tandem with mounting expenditure driven by freebies and subsidies contribute to the State’s growing revenue deficit.

Presenting the interim budget for 2016-17, the final one for the current government, the Finance Minister O Panneerselvam said the State continues to witness slow rate of growth in tax revenue of the previous two years in the current year also.

Just the drastic fall in international crude oil prices over the last year and a half has reduced the sales tax realisation from petroleum products by ₹4,000 crore a year in 2015-16.

The Revenue Deficit in 2015-16 is ₹9,481 crore according to the revised estimates against a projected surplus of ₹783 crore. This is a 32 per cent growth in deficit over that of the previous year. For 2016-17, the Budget Estimate of revenue deficit is ₹9,154 crore.

Panneerselvam said the huge revenue deficit is unavoidable due to the drop in State’s own tax revenue. Also, the State government is implementing many unique schemes such as in housing, distribution of free household appliances such as fans, mixies, grinders and laptop computers for students.

However, in the revised estimates for 2015-16 the Fiscal Deficit is estimated at ₹32,359 crore has been contained at 2.94 per cent of Gross State Domestic Product (GSDP) which is well below the limit prescribed by the 14th Finance Commission.

The government did not make any new announcement as it was just presenting an interim budget. The present government completes it five-year term in May 2016.

Enumerating some of the highlights of the administration, he said Tamil Nadu has achieved an average annual GSDP of 8.01 per cent in real terms between 2011-12 and 2015-16.

It has presented the Vision 2023 document that provides for planned economic growth. The interim budget provides for ₹2,000 crore for the Tamil Nadu Infrastructure Development Fund and ₹ 200 crore for project preparation fund.

The Tamil Nadu Innovative Initiative was launched in 2014-15 with an annual allocation of ₹150 crore to make the state an innovation hub. The State Balanced Growth Fund was launched in 2012-13 with an annual allocation of ₹ 100 crore. New Entrepreneurship-cum-Enterprise Development Scheme was launched for first generation entrepreneurs.

Some of the social security initiatives include free rice to all card holders, distribution of livestock to the poor, free household appliances, laptops and social security pension and a comprehensive health cover.

Resources

For 2016-17, the State’s own tax revenues are projected at ₹ 96,531 crore against ₹ 86,537 crore in the revised estimates for 2015-16.

Commercial taxes are expected to grow at 11.69 per cent to ₹72,326 crore over 2015-16 Revised Estimates; State Excise Duty is expected to reach ₹7,101 crore; Stamp Fees and Registration to ₹10,548 crore; and taxes on Motor Vehicles is expected to net ₹4,925 crore.

Budget estimates of total subsidies and transfers amount to ₹62,382 crore in 2016-17 against Revised estimates of ₹59,741 crore for 2015-16.

Subsidies and Freebies in 2016-17

Food Subsidy: ₹ 5,500 crore

Power Tariff subsidy: ₹ 7,370 crore

Transport Assistance: ₹ 6,281 crore (includes Students Concession Subsidy ₹ 2,276 crore; Diesel Subsidy: ₹ 1,190 crore).

Free cycles:

Under Adi Dravidar and Tribal Welfare: ₹ 64 crore

To Government school students: ₹ 162 crore

Freebies since 2011

Free laptops: 31.78 lakh computers distributed at a total cost of ₹ 4, 331 crore

Free household appliances: 1.76 crore sets of electric fans, induction stoves, mixies and grinders at a total cost of ₹ 7,755 crore

Free cycles:

-For Adi Dravidar and Tribal Welfare 8.63 lakh cycles at a cost of ₹ 289 crore

-To Government and aided schools 22.18 lakh cycles at a cost of ₹ 736 crore

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