Chennai: Tamil Nadu’s finances looked southwards with the fiscal deficit crossing Rs 1 lakh crore in the year 2020-21 as per the revised budget presented on Tuesday by deputy chief minister O Panneerselvam in the assembly.
The economic growth, that used to be around 7% each year, is expected to be at 2.02% in the present financial year. Growth expectation in the next financial year 2021-22 is at 11.5%.
Presenting the interim budget, the numbers for the present financial year showed that Tamil Nadu tax revenue declined by nearly 18% in the revised budget compared to the budget presented in February last year.
The budget had expected a total tax revenue of Rs 1.33 lakh crore but in the revised budget, the government is expecting its tax revenue to be Rs 1.09 crore as the state like all other states had intense lockdown for nearly 6 months before unlocking of lockdown started.
The government’s fiscal deficit, expected to be 2.84% in the 2020-21 budget, is expected to touch 5% of GSDP at the end of the present financial year. The AIADMK government will be crossing the 3% line of fiscal deficit for the second time in the last give years. In 2017-18, the fiscal deficit crossed 4% as the government took over a part of Tangedco’s debt as per the UDAY scheme.
With the revenue declining, the government had to borrow from various sources to pay salaries, pension and also spend on the health and welfare department to prevent the spread of Covid-19.
Tamil Nadu’s total debt, which was Rs 1 lakh in 2011, has increased to Rs 5.70 lakh crore which is 26.69% of the GSDP. The government is not confident to lower the debt but expects it to increase to 27.44% in 2022-23 and 27.50% of the GSDP in 2023-24.
“The government plans to borrow a net amount of Rs 84,686.75 crore in the present financial year. The revenue deficit in the revised estimates for 2020-21 is expected to be Rs 65,994.06 crore against the budget expectations of Rs 21,617.64 crore,” said Panneerselvam.
The government expects the revenue deficit to be Rs 33,510 crore in 2022-23 and Rs 24,483 crore in the next year.
The government is confident of increasing its revenue in the next financial year. “Though there is slowdown at present, the Indian economy is expected to gain momentum in the coming years. Despite the current economic downturn, Tamil Nadu’s growth is higher than that of national GDP, which is a positive sign,” said Panneerselvam.
“Various steps like resource augmentation measures and improvement of resource collection efficiency is bound to help maintain a healthy growth in revenue receipts of the state,” said the deputy chief minister.