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Tamil Nadu plans to reduce the fiscal deficit from 4.99 per cent of state GDP (GSDP) in 2022-21 to less than 3 per cent in two years, according to the Medium-Term Fiscal Plan (MTFP) placed before the Assembly along with the Interim Budget for 2021-22.
The MTFP aims to progressively reduce fiscal deficit as a percentage of GSDP to 4 per cent in 2021-2022; 3.5 per cent in 2022-2023 and 3 per cent from 2023-2024.
The State’s revenue deficit shot up to ₹65,994 crore as against the ₹21,617 crore budgeted for FY21. This is on account of a ₹38,674 crore shortfall in revenue receipts and a ₹5,701 crore increase in revenue expenditure. The MTFP states that the revenue deficit will fall to ₹24,484 crore in FY24 through improved resource mobilisation and enhanced growth-oriented spending.
Even in FY21 the government has increased the share of capital spending and will take it up further to ₹43,170 crore in FY22.
According to Budget documents, the government plans to borrow a net amount of ₹84,686 crore in 2021-22. Due to ‘special’ reasons, the borrowing ceiling has been increased to 5 per cent of the GSDP from 3 per cent. This is around ₹95,000 crore in 2021-22. Based on this, the State government has managed FY21. Next year, the borrowings will be lower and is estimated at ₹84,686 crore, said Finance Secretary S Krishnan.
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