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Declining revenue, fiscal deficit zoms: AIADMK government presents interim budget before Tamil Nadu assembly elections

ChennaiAhead of the Assembly elections to be held in April, the AIADMK government in Tamil Nadu on Tuesday presented an interim budget for 2021-22 with the COVID-19 epidemic declining 17.64 percent in revenue and fiscal deficit expansion.

The budget presented by the DMK and its allies amid a boycott projected a positive growth rate of 2.02 percent in 2020-21 as it anticipated the economy to rebound due to various policy decisions of the government.

Chief Minister K Palaniswami allocated Rs 5,000 crore for a Rs 12,110.74 crore cooperative crop loan waiver scheme earlier this month, with Finance Minister Deputy Chief Minister O Panneerselvam announcing expectations with round-the-clock elections.

He urged the Center not to recommend the grant to the 15th Finance Commission to finance its share for the Central Sector and Centrally Sponsored Schemes.

“I reiterate my call to the Government of India to merge surcharges with the basic rate of tax so that the states receive a legitimate share of revenue.”

The deputy CM said that the share of the state’s central taxes as indicated in the Union Budget at Rs 32,849.34 crore (2020-21) has been revised to Rs. 2,3,039.46 crores.

While the main opposition DMK and its allies, including the Congress and the Indian Union Muslim League, boycotted the budget presentation by walkout, Leader of the Opposition MK Stalin, in a statement, condemned the loan of Rs 5.70 lakh-lakh crore to the government. . .

As soon as Panneerselvam started his budget speech, DMK Deputy Leader Duraimurgan, Speaker P. Urged Dhanapala to allow him to express an ‘attitude’, which was withheld.

Where there was a dinner for a while, opposition members eventually staged the walkout, boycotting the presentation of the interim budget, the last by the current AIADMK government before the election.

Stalin, who did not participate in the proceedings of the House, assured ‘development’ for the state after winning power in the upcoming elections.

With a shading shadow, the state’s own tax revenue (SOTR) is now expected to be Rs 1,09,968.97 crore in revised estimates for 2020-21, a fall of 17.64 percent as against revenue estimated at Rs 1,55,530.30 crore. In the budget estimate.

The total revenue receipts in the revised estimates (2020-21) are Rs 1,80,700.62 crore, which is 17.63 percent less than the budget estimates.

With an epidemic requirement of an additional expenditure on the revenue account of Rs 12,917.85 crore mainly for health and relief, the total revenue deficit (2020-21) is estimated to be Rs 65,994.06 crore, with an estimate of Rs 21,617.64 crore. Estimates for 2020-21.

Panneerselvam said that in the Revised Estimates (2020-21), the fiscal deficit is estimated to be Rs 96,889.97 crore, 4.99 per cent of the gross state domestic product, yet within the 15th Finance Commission limit.

In the budget of 2021-22, the revenue deficit is estimated at Rs 41,417.30 crore and the fiscal deficit is Rs 84,202.39 crore, which is 3.94 percent of the gross state domestic product (GSDP).

Revenue expenditure has been estimated at a total level of Rs 2,60,409.26 crore.

Noting that the budget has an ‘imprint’ on the unprecedented challenges posed by the epidemic, the Deputy CM said Tamil Nadu is being seen as an ideal state in dealing with COVID-19.

In total, the government spent Rs 13,352.85 crore on the epidemic response, he said.

As per the recommendation of the high-level panel, additional restrictions amounted to Rs 20,013 crore for higher capital expenditure including irrigation, housing and highways.

In view of such measures, the state is expected to register a positive growth of 2.02 percent against the all-India negative growth rate of 7.7 percent in 2020-21.

Panneerselvam said that Rs 43,170.61 crore has been provided in the budget estimate for 2021-22 to further economic growth, as against Rs 37,734.42 crore in the revised estimate for 2020-21 towards capital expenditure.

Due to the epidemic, the state’s own tax revenue (STOR) collapsed in the first four months of the current financial year and the collection of state GST and value-added tax began from August last year.

The collection of stamp duty and registration fees has also revived, but the motor vehicle tax collection has not yet fully recovered.

Given the epidemic, there was a sharp drop in revenue, “but spending levels had to increase to protect the welfare of the people,” he said.

Therefore, “it is entirely unavoidable that the government had to resort to borrowing as a result of the greater fiscal deficit,” he said.

In his two-and-a-half-hour address, he said that the government intends to borrow Rs 84,686.75 crore and the GSDP percentage is expected to be 27.44 percent in 2022-23 and 27.50 percent in 2023. 24 well within the criteria outlined by the 15th Finance Commission.

The total debt outstanding as on 31 March 2021 is estimated at Rs 4,85,502.54 crore and Rs 5,70,189.29 crore by 31 March 2022.

Budget, State GST revenue increased to Rs 45,395.50 crore in the last term of 2016-21 of AIADMK, excise duty Rs 9,613.91 crore and receipts Rs 56,413.19 crore and total business tax exceeded Rs 1.02 lakh crore.

A provision of Rs 11,982.71 crore has been made for agriculture and in the revised estimates (2020-21) the provision of food subsidy has been increased from Rs 6,500 crore to Rs 9,604.27 crore.

The government made allocations to other departments including a huge subsidy of Rs 8,834.68 crore for the Tamil Nadu Generation and Distribution Corporation, a power generation and distribution unit in the state.

Overall, the SOTR is expected to be Rs 1,09,968.97 crore in the revised estimates (2020-21), representing a fall of 17.64 percent against the estimated Rs 1,33,530.30 crore as revenue in the 2020-21 budget estimates. is.

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