Dr Palanivel Thiaga Rajan said the government's reforms reduced the annual revenue deficit of ₹62,000 crore to ₹.30,000 crore.
Two metro rail projects in Coimbatore and Madurai, and a memorial for the martyrs of the anti-Hindi agitation of 1937-40 were among the proposals made in the Tamil Nadu Budget by Finance Minister Dr Palanivel Thiaga Rajan tabled in the Assembly on Monday, 20 March.
While presenting the Budget for the financial year 2023-24, Thiaga Rajan — popularly known as PTR — said that the government’s unprecedented and difficult reforms reduced the state’s annual revenue deficit of around ₹62,000 crore to around ₹.30,000 crore in the revised estimates for the current fiscal.
Even as PTR started presenting the Budget, Opposition AIADMK MLAs under Edappadi K Palaniswami raised slogans condemning the DMK for the alleged debasement of the Erode by-election, and the “deteriorating” law and order situation.
They staged a walkout from the Assembly. However, the deputy Opposition leader O Paneerselvam and his group of MLAs remained in the House throughout the Budget presentation.
The minister commenced his Budget speech by quoting a couplet from The Thirukural, saying that the government is bracing for challenging times caused by unprecedented inflation, the war in Ukraine, and the volatility in the global economy and markets.
“We have outperformed (the Centre) by growing faster than the national average in the previous year and by significantly lowering the revenue deficit and fiscal deficit when compared to that of the Union government,” PTR said.
Stating that the state’s tax revenues, which were at a healthy eight percent of the Gross State Domestic Product (GSDP) during 2006-11, witnessed a sharp fall over the past 10 years and touched 5.58 percent in 2020-21.
It was lower than other large states such as Maharashtra and Karnataka, the minister said
“Though the tax-GSDP ratio has increased to 6.11 percent in the current year due to this government’s efforts in the past two years, concerted action is needed to raise it further to find financial resources for welfare schemes,” PTR announced.
Further, the state’s tax revenue is estimated to increase to ₹1,51,870.61 crore in the revised estimates, as compared to ₹1,42,799.93 crore in the Budget estimates for the financial year 2022-23.
In the coming year, it is estimated that the state’s own tax revenue will further increase to ₹1,81,182.22 crore, up 19.30 percent over the revised estimates.
The share of central taxes is estimated at ₹38,731.24 crore in revised estimates and at ₹41,664.86 crore in the Budget, in line with the projections in the Union Budget.
“While there is an increase, it continues to be far less than what should have been devolved to the states but for the indiscriminate levy of cesses and surcharges by the Union government,” PTR said.
Grants-in-aid from the Union government are estimated at ₹39,748.42 crore in the revised estimates (including the payment of GST Compensation arrears of ₹16,214.83 crore) and ₹27,444.64 crore in the Budget, which includes expected GST arrears of ₹4,572.82 crore in the coming year, the finance minister said.
PTR alleged that the BJP-led Union government, despite multiple representations from the states, has refused to extend the original GST compensation period (of guaranteed 14 percent year-over-year growth) beyond the five years that expired on 30 June, 2022.
The Centre’s refusal to extend the compensation period has deprived the states of a vital source of revenue.
The minister said that the total revenue expenditure is expected to be ₹3,08,055.68 crore in the coming year. He estimated a revenue deficit of ₹37,540.45 crore.
The Budget estimated the state’s total capital outlay, including net loans and advances, to be ₹54,534.46 crore.
Further, the total outstanding debt of the state is estimated to be ₹7,26,028.83 crore and the debt-GSDP ratio will be 25.63 percent, which is within the 29.1 percent for the 2023-24 limit set by the 15th Finance Commission.