For the first time in eight years, Tamil Nadu's revenue deficit will come down to 3.08 per cent of State gross domestic product (GSDP) from 4.15 per cent this fiscal. It will reduce by about ₹7,000 crore.
“On account of prudent fiscal management of this government, the overall revenue deficit has decreased to ₹55,272.79 crore in revised estimates as against the budgeted amount of ₹58,692.68 crore,” said Finance Minister Palanivel Thiaga Rajan while presenting the DMK government’s first full Budget (2022-23) on Friday. ₹
The revenue deficit in the previous year (FY21) was ₹61,320 crore. In 2022-23, it will be ₹52,781.17 crore.
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The government has allocated ₹9,379 crore to compensate the utility for tariff subsidy“Despite financial strain faced due to the third wave of the Covid-19 pandemic and unprecedented floods, the government has fulfilled many poll promises focused on improving the livelihood of the poor. This has resulted in an increase in expenditure on subsidies. However, the government has managed to contain other expenditure through prudent fiscal management,” the Minister said.
Total revenue expenditure in the revised estimates (RE) 2021-22 has been estimated at ₹2,59,150.97 crore as against budget estimates (BE) of ₹2,61,188.57 crore.
Rajan said the pandemic and unprecedented floods have severely affected the State's own tax revenues. The commercial taxes, State excise and motor vehicles tax are projected to fall short of the budgetary estimates in the RE.
In the aggregate, State's own tax revenue is expected to be ₹1,21,857.55 crore in the RE as against ₹1,26,644.15 crore in BE.
There is an increase in the share in Central taxes component due to increased tax collection realised by the Union Government and release of arrears pending to the State. The share in Central taxes is estimated at ₹33,580.22 crore in the RE as against ₹27,148.31 crore in BE.
The grants-in-aid from the Union Government has been estimated at ₹36,609.47 crore in RE against ₹34,564.42 crore in BE. This increase is due to arrears received for the previous years.
Due to the present economic conditions, the estimated growth in the collection of State's own non-tax revenue revenue has not been realised.
Collections from the State's own non-tax revenue have been estimated at ₹11,830.93 crore in RE, which is lower than ₹14,139.01 crore in BE.
The State's total revenue receipts have been estimated at ₹2,03,878.17 crore in RE, which is an increase from ₹2,02,495.89 crore, compared to the Budget Estimates, he said.
The unprecedented rainfall and floods, as well as the restrictions imposed to control the third (Omicron) wave of the pandemic have resulted in delay in the execution of capital works. The total capex in the RE is ₹37,936.23 crore as against ₹42,180.97 crore in BE.
In the BE 2022-23, taking into account factors such as the growth in State’s economy, ongoing measures to raise additional revenues and improved tax collection, the State’s own tax revenue is estimated with the components are commercial taxes (₹1,06,765.22 crore); State excise (₹10,589.12 crore); stamps and registration fees (₹16,322.73 crore) and motor vehicles tax (₹7,149.25 crore).
The States’ own tax revenue is estimated to be ₹1,42,799.93 crore in the Budget while the non-tax revenue is projected to be ₹15,537.24 crore.
The share in the Central taxes component is estimated at ₹33,311.14 crore. Considering that the pending GST compensation dues will be received from the Union Government in the coming year, the grants-in-aid have been projected at ₹39,758.97 crore.
In the Budget, the total revenue receipts are expected to be ₹2,31,407.28 crore. The total revenue expenditure is expected to be ₹2,84,188.45 crore. This includes the expenditure due to increase in dearness allowance and pension payments as a result of increase in retirement age. Adequate allotment has been made for the new and existing schemes, he said.
This government will take all necessary measures to increase the efficiency in tax collection. Based on this, the revenue deficit is estimated at ₹52,781.17 crore, he said.
To increase employment opportunities and to promote growth, the total capital expenditure including net loans and advances in the Budget is estimated at ₹43,832.54 crore. This is 23.28 per cent higher than the RE 2021-22.
Rajan said that 15th Central Finance Commission has recommended a fiscal deficit upto 4.5 per cent of GSDP to States in 2021-22. However, the fiscal deficit as a percentage of GSDP has reduced to 3.80 per cent in the RE from 4.33 per cent in the BE.
Fiscal Deficit
The Finance Minister estimated fiscal deficit in FY23 at 3.63 per cent of GSDP.
In the year 2022-23, the net public debt is projected at ₹90,116.52 crore. Therefore, on March 31, 2023, the total outstanding debt will be ₹6,53,348.73 crore and the Debt-GSDP ratio will be 26.29 per cent. This is within the limits set by the 15th Central Finance Commission, Rajan said.
“I am confident that this Budget will be the beginning of a great transformation. In the last regime since 2014, the State finances have been on a decline. This is clearly illustrated by the rising revenue deficit and increasing proportion of interest payments to revenue receipts, among other indicators. After this seven-year slump, the reduction in revenue deficit, even in such a challenging year is a testimony to this government's prudent fiscal management,” he added.
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