Panneerselvam presents tax-free, Revenue deficit budget

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Chennai:O Panneerselvam Presenting the revised budget estimates in the State Assembly, he pegged the revenue deficit at Rs 15,854.47 crore and the fiscal deficit at Rs 40,533.84
crore for the year 2016-17.

He said the in the interim budget, the revenue deficit has been estimated to be Rs 9,154.78 crore.

However, due to continuing global economic slowdown, the tax revenue growth has been slow. “There is significant fall in State’s own Tax Revenue growth rate, particularly in Commercial Taxes because of the reduced sales tax realisations due to falling in tax revenue from petroleum products.”

Mr. Panneerselvam said taking into account these factors, the revenue deficit has been revised to Rs 15,854.47 crore.

He said as per the present trend it was estimated that Tamil Nadu’s growth rate would be high and inflation was expected to moderate in the current fiscal.

The total revenue receipts of the state, including the central transfers, were  estimated at Rs 1,48,175.09 crore in 2016-17 as against Rs 1,52,004.23
crore in the interim budget.

Due to an implementation of many new schemes like waiver of agricultural loans of small and marginal farmers owed to the cooperative institutions and free  power to domestic consumers up to 100 units and continuance of various welfare schemes have indeed increased the expenditure of the state.

During 2016-17, the revenue expenditure was estimated at Rs 1,64.029.56 crores as against Rs 1,61,159.01 crore in the interim budget.

“As a result, the Revenue Deficit for the ongoing financial year has been estimated to be Rs 15,854.47 crore”, Mr. Panneerselvam said, adding, in view of this, the necessary amendments to Tamil Nadu Fiscal Responsibility Act, 2003 would be introduced in the current Assembly session.

The fiscal deficit was pegged at Rs 40,533.84 crore (as against Rs 36,740.11  crore in the interim budget), which was 2.96 per cent of the Gross State Domestic  Product (GSDP)  and was well below the limit prescribed by the Tamil Nadu Fiuscal Responsibility Act, 2003, Mr. Panneerselvam said.

“In the coming years, Fiscal deficit of GSDP ratio will be 3.34 per cent in 2017-18 and 2.96 per cent in 2018-19”, he said, adding, the state has to go for additional resource mobilisation or resort to control in expenditure in order to limit fiscal deficit within three per cent norm, while managing additional expenditure commitments during 2017-18.

He said the capital expenditure has been projected to increase from Rs 22,878.45 crore to Rs 24,679.38 crore. It was expected to grow further at 9.25 per cent in 2017-18 and 11.13 per cent in 2018-19.

Since the Central government has revised the GSDP figures as per the  new 2011-12 series, the Net Borrowing Ceiling was also revised to Rs 41,085 crore in 2016-17.

However, the budgetary borrowings have been estimated to be Rs 40,529 crore in the revised budget estimates.

The Finance Minister also said the overall outstanding borrowings of the State had been estimated to be Rs 2,52,431 crore at the end of this financial year, while the revised outstanding debt to GSDP ratio would be 18.43 per cent GSDP.

He said taking into account the state government’s decision to close down 500 TASMAC liquor shops, the excise duty collection for the current financial  year has been scaled down to Rs 6,636.08 crore.

The Minister said “the overall state’s own tax revenue during the current fiscal is pegged at Rs 90,691.87 crore and the receipts under state’s own  non-tax revenue at Rs 9,723.95 crore”, he added.

Asserting that the state government has been taking all steps to put the economy back on the growth path, Mr. Panneerselvam said on the revenue side, there  was a significant fall in the growth of the State’s own tax revenue, particularly in commercial taxes, which has impacted the revenue receipts severely.

“Further the reduced share in central devolution, delay in reimbursement of grants-in-aid from the Union government, in addition to reduced central share in centrally-sponsored schemes, have caused further strain on the state finances”, he said.

Stating that expenditure trends were steady, the Minister said in spite of these constraints on revenue receipts, the overall fiscal deficit, net borrowings and outstanding debt-GSDP ratio would be within the permissible limits, except fiscal deficit during 2017-18.

While the state’s share in Central taxes for the year was estimated at Rs 23,018.12 crore, the grants-in-aid from the centre were Rs 24,741.15  crore taking into account the grants under the 14th Finance Commission and Central assistance to State plan.