The Tamil Nadu government on Thursday presented a tax-free Budget for 2013-14, proposing 'prudent fiscal management'.
Finance minister O Panneerselvam in his Budget speech said despite all the pressures, no new tax would be imposed nor would there be any hike in the existing taxes.
Despite agriculture, manufacturing and services sectors facing a crisis in the wake of a drought situation, economic slowdown and other issues, the government had decided not to burden the public, he said.
The recent fuel price increase had put pressure on public transportation, which is suffering a huge loss. For 2013-14, Rs 500 crore has been allocated in the Budget.
Food subsidy has also been increased to Rs 4,900 crore and it has been decided to double the price stabilisation fund to Rs 100 crore. The fund has been constituted to extend interest-free financial support to cooperative societies for market intervention. The finance minister said this would enable the cooperatives to procure select commodities during abnormal price rise and sell them through cooperative outlets at cost price to the public.
While attributing the rise in essential commodities price to diesel price hike, the minister said the corpus would be increased to Rs 100 crore.
Industries
The state government has set a target to attract investments worth Rs 1.90 lakh crore over the next 10 years in southern districts and would introduce new incentives.
Besides, State Industries Promotion Corporation of Tamil Nadu Limited (Sipcot) will set up a land bank with 25,000 acres for industrialisation purpose. A new ship building project and manufacturing zones are also on the cards.
The government is also planning to join hands with industries to train youths.
Infrastructure
Panneerselvam said power projects worth Rs 21,000 crore would be taken up to address the demand.
These include 1,980 Mw power projects at Ennore and a 2X660 Mw project at Udangudi. Work on these would be taken up in 2013-14. At present, the state is facing a power shortage of 4,000 Mw. Besides, he said MoUs were signed to buy 226 MW of power from solar farms.
The state government has also given approval for restructuring loans. Of the Rs 12,213 crore short-term loan of the state electricity board, 50 per cent will be absorbed by the state. The board had a debt of Rs 45,000 crore, towards which Rs 7,913.35 crore was allotted in 2011-12 and in 2012-13 Rs 11,242 crore was allotted to pay back the debt. It has also given guarantee for the board to raise Rs 10,000 crore from REC and Power Finance Corporation.
The state has allotted Rs 2,000 crore for infrastructure development and said 60 per cent of the other infrastructure development planned would be taken up by private participants. A sum of Rs 750 crore has been allotted for the metro rail project.
Taxes
The state has already started feeling the pinch of the economic slowdown as seen in a lower growth in gross state domestic product (GSDP). The GSDP, according to the Advance Estimates for 2012-2013, is only 4.61 per cent at constant prices.
“The severe drought and crop failure have hit us badly in the primary sector, which has ultimately affected the service sector growth as well. The general economic slowdown in the national economy and shortage of power have hampered growth in the manufacturing sector,” said the minister.
It put forward a medium-term fiscal plan for the period between 2013 and 2016, expecting the fiscal deficit to GSDP ratio at 2.71 in 2015-16.
The government has set an overall target for the state’s own taxes at Rs 86,065.4 crore, with a projected growth rate of 17 per cent over the revised estimates for 2012-13. The estimates for commercial taxes, excise duty and motor vehicles taxes are Rs 56,025.24 crore, Rs 14,469.87 crore and Rs 4,881.15 crore respectively. Public debt was restricted to Rs 15,675 crore in 2012-13, even thought the state had an eligibility to raise net public borrowing to Rs 20,716 crore in 2012-13.
“The net borrowing is lower than the projected capital expenditure, showing that this entire borrowing is going to finance capital expenditure alone,” said the minister. The government proposes a net borrowing of Rs 21,142 crore to finance its
capital works during 2013-14 as against the approved limit of Rs 24,263 crore.
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Projects revenue surplus of Rs 664 cr During 2013-14, the government is projecting a revenue surplus of Rs 664.06 crore and a fiscal deficit of Rs 22,938.57 crore. The fiscal deficit will be 2.84 per cent of the GSDP, even as the stipulated norm for fiscal deficit to GSDP is three per cent. |
For the fiscal 2012-13, the revenue surplus was projected at Rs 2,376 crore. However, owing to increased expenditure commitments, especially to revive Tangedco and the substantial reduction in receipts from the Government of India, the revised estimate now stands at Rs 451.52 crore. The fiscal deficit has been restricted to Rs 19,889.31 crore, around 2.88 per cent of the GSDP, he said.
Principal Secretary - finance, K Shanmugam, later told reporters the interest portion alone was Rs 10,754 crore in 2012-13 of the total Rs 1.21 lakh crore and in 2013-14 the interest payment will be Rs 13,584 crore, an increase of around 27 per cent. This was mainly due to state government’s decision to absorb TNEB’s Rs 6,000 crore.
The total revenue receipts of the state government are estimated at Rs 118,579.87 crore in 2013-2014. The revenue expenditure in 2013-2014 is estimated at Rs 1,17,915.81 crore, which shows a growth of 15 per cent over revised estimates 2012-2013.
Plan size
The size of Tamil Nadu Plan during the 12th Plan period has been pegged at Rs 2.11 lakh crore. The outcome of the entire planning process will be eradication of poverty, creation of more and better job opportunities and overall improvement in the quality of life, Panneerselvam said.
The state will exceed the annual Plan target of Rs 28,000 crore in 2012-13 and the allocation has been increased to Rs 37,000 crore in 2013-14.
Around Rs 17,220.89 crore has been kept as overall allocation for the primary sector, an increase of 20.12 per cent, in the Budget estimates for 2013-14. Agriculture has got the highest-ever allocation of Rs 5,189.15 crore during 2013-14, over the current year's Rs 4,829.93 crore.
The crop loan target under the co-operative sector would be stepped up from the present Rs 4,000 crore to Rs 4,500 crore in the next fiscal. During 2013-14, the government has allocated Rs 250 crore to distribute around 12,000 milch cows and 600,000 sheep and goats to 150,000 poor women.
Other allocations
A sum of Rs 16,965.30 crore has been provided for the School Education department, which is the highest among all departments, Rs 6,511.76 crore for the health sector and Rs 4,887.69 crore for rural local bodies.
In the Budget Estimates 2013-14, Rs 500 crore has been provided for the Chennai Mega City Development and Rs 750 crore for the Urban Development Mission.
