The Tamil Nadu Government has detailed its approach to economic development with emphasis on the growth of agriculture and manufacturing for sustained development with services playing a supportive role.

Presenting the 2011-12 Budget with a ‘marginal revenue surplus' of Rs 173.87 crore, the Tamil Nadu Finance Minister, Mr O. Panneerselvam, said that the Government is aware that the services sector-led growth may not be sustainable in the long run. It will focus on the primary and manufacturing sectors as the main drivers to achieve an overall growth of over 10 per cent. However, critical bottlenecks in infrastructure development will be addressed to grow the services sector.

In the first Budget following the Government coming to power, emphasis has been on fulfilling the electoral promises and about Rs 8,900 crore worth of new schemes and benefits have been announced.

Agriculture

Mr Panneerselvam spelt out the Government's strategy to grow agriculture with the objective of tripling farmers' income in the next five years. With a foodgrain production target of 115 lakh tonnes in the current year against last year's production of 85.35 lakh tonnes, the focus will be on increasing productivity through technology dissemination, mechanisation and supporting irrigation growth.

Over Rs 3,000 crore crop loans — interest free for prompt repayment — will be disbursed through co-operatives in 2011-12. Allocation under various programmes has also been hiked, he said.

Industry

For industrial growth, the State Government will soon come out with a new industrial policy 2011 and sector-specific policies to catalyse automobiles and auto components, information and communication technology, biotechnolocy and pharma industries.

A shelf of projects will be created for strengthening infrastructure for continuous implementation. The Chief Minister will head a Tamil Nadu Infrastructure Development Board to identify and expedite the projects through public sector and public private partnerships, he said.

A new land acquisition policy will be formulated to create land banks for industry and infrastructure while protecting the interests of land owners.

Fiscal Projections

On the fiscal projections, the Finance Minister said the overall outstanding debt by the end of the current fiscal year is expected to be Rs 1,18,610 crore including net borrowings of Rs 17,261 crore needed to sustain development initiatives.

But borrowings are expected to drop in the coming years with growth in economy and tax revenue.

Also, the debt will be at 20.39 per cent of the Gross State Domestic Produce against the norm of 24.50 per cent fixed by the Thirteenth Finance Commission.

Recent changes in taxes are expected to give it an additional Rs 3,618 crore in the current year to support development measures.

The total revenue receipt for the year in the revised budget estimate is Rs 85,865 crore.

The State's own tax revenue is projected at Rs 59,787 crore, non-tax revenue Rs 5,015 crore, share of Union taxes Rs 13,711 crore and grant-in-aid from Centre Rs 7,772 crore.

The revenue expenditure is pegged at Rs 85,511 crore. Fiscal deficit will be Rs 16,881 crore at 2.90 per cent of GSDP and the Government is on track in fiscal consolidation.

No new taxes were announced in the Budget. Addressing a press conference following the Budget presentation, the Finance Secretary, Mr K. Shanmugam, said Tamil Nadu was among the more fiscally disciplined States with its debt being the third lowest in the country.

There was ‘good tax buoyancy' which help manage revenue side expenses. Commercial taxes are projected to grow to Rs 37,196 crore against Rs 28,614 crore in 2010-11.

The buoyancy is reflected widely with State excise set to grow to Rs 10,191 crore (Rs 8,115 crore); stamps and registration Rs 6,492 crore (Rs 4,650 crore).

The recent changes in VAT announced will net the State Government Rs 5,100 crore in a full year.

Related Topics
comment COMMENT NOW