TN Budget focuses on infra, education

In his presentation of the state budget for 2008-09 on Thursday, TN finance minister S Anbazhagan laid stress on infrastructure, education and agriculture development to further strengthen the gains made by the state in attracting investments into a host of sectors ranging from telecom and automobile manufacturing to auto components, leather and chemical industries over the past two years.

To upgrade the highways, the Tamil Nadu government has allotted Rs 4,179 crore for the highways department in this budget.

For urban road upgrade, the government will implement the Tamil Nadu Urban Roads Development Project scheme from the coming financial year, Anbazhagan said.

The scheme will be implemented at an estimated cost of Rs 1,000 crore and will have multiple sources of financing, including Rs 147 crore of arrears of devolution from the state government, a portion from the assigned revenue payable to municipal corporations and municipalities on account of the surcharge on stamp duty and bonds which will be issued by the Tamil Nadu Urban Road Infrastructure Fund (TURIF).

Under the scheme, all roads in municipal corporations and municipalities are proposed to be fringed with pavements, supported by storm water drainage and provision for laying pipes.

In the first phase, roads in Chennai, Trichy, Tirunelveli, Tiruppur and Madurai municipal corporations will be upgraded. So will roads in Alandur, Mayiladuthurai, Karur, Inam Karur, Kumbakonam, Thanjavur and Valasaravakkam municipalities, where the underground sewerage schemes have already been completed.

Anbazhagan said Rs 85,344 crore has been sanctioned towards the state's outlay under the 11th Five Year Plan. The annual plan for 2008-2009 will be implemented with an outlay of Rs 16,000 crores, he added. The government proposes to disburse crop loans to the tune of Rs 1,500 crore during 2008-2009.

Anbazhagan said that following the waiver of co-operative crop loans to the tune of Rs 7,000 crore in the state, the government has compensated the co-operative institutions by providing Rs 3,304 crore as financial assistance in the last two years and a further sum of Rs 1,150 crore is being allocated in 2008-2009 towards the same end.

He added new crop loans, amounting to Rs 1,250 crore were disbursed during 2006-2007 and Rs 1,177 crore disbursed as of March 20 this year.

To further give a fillip to agriculture, the government has decided to reduce the interest rates on crop loans given by co-operative banks, from 5 per cent to 4 per cent in the coming financial year. The government had earlier reduced the interest rates on crop loans by co-operative banks from 9 per cent to 7 per cent in 2006-2007.

The government has increased the allocation to the School Education Department for the coming academic year to Rs 7,852 crore from Rs 4,110 crore in 2005-2006.

The government has allotted Rs 200 crore as the state's share for Scheme of Access to and Improvement of Quality of Education at Secondary Stage (Success) which was introduced by the government of India.

In the coming financial year, Rs 54 crore has been allocated for providing free textbooks to students and Rs 58 crore for providing free school uniforms. Rs 112 crore has been set aside for providing free bicycles to students studying in the XIth standard.

In addition, Rs 300 crore has been provided as grants to state transport undertakings for implementing free or concessional bus passes for students.

Revised estimates of the state's consolidated fiscal deficit during 2007-08 have projected it at Rs 10,108.45 crore (3.50 per cent of state GDP), an increase of over Rs 400 crore from the earlier projection of Rs 9,634.91 crore. By contrast, the accounted fiscal deficit in 2006-07 was Rs 5,174.94 (2 per cent of state GDP), over Rs 3,000 crore short of earlier projections of Rs 8,202.84 crore.

The government has projected tax receipts under revised estimates at Rs 29,248.07 crore for 2007-08, from earlier projections of Rs 30,387.04 crore. Tax receipts in 2006-07 were at Rs 27,771.15 crore, well ahead of projections of Rs 22,476.42 crore that year.

For 2008-09, total capital expenditure of the government, including loans and advances (net), is estimated at Rs 9,876.35 crore.

However, this is expected to result in a provisional fiscal deficit of Rs 9,792.30 crore, according to budget estimates. In that case, the consolidated fiscal deficit for 2008-09 would be an estimated Rs 12,624.24 crore.