Tamil Nadu Finance Minister O Panneerselvam today presented a tax-free interim budget for 2016-17 ahead of assembly polls and pegged revenue deficit at Rs.9,154.78 crore, terming it as unavoidable.
He also expressed confidence that Chief Minister Jayalalithaa will sweep back to power.
Presenting the budget in the ongoing last session of the 14th Assembly, he said the revenue deficit was unavoidable. "The huge revenue deficit is unavoidable due to falling state's own tax revenue especially the sales tax revenue from petroleum products."
Total revenue receipts have been estimated at Rs 1,52,004.23 crore, total revenue expenditure at Rs 1,61,159.01 crore and revenue deficit at Rs 9,154.78 crore.
"Further, when the state is implementing unique schemes like green houses, free distribution of fan, mixer, laptops, such revenue deficit is unavoidable," he said.
In the revised estimates for 2015-16, fiscal deficit was estimated at Rs 32,359.59 crore which was 2.94 per cent of Gross State Domestic Product and for 2016-17 it has been projected at Rs 36,740.11 crore, he said.
"The fiscal deficit to GSDP ratio has been contained to 2.92 per cent which is well below the limit prescribed by the 14th Finance Commission."
Stating that Chief Minister Jayalalithaa "enjoys overwhelming support" of all sections of society, he said she "has striven to fulfill the aspirations of all citizens and has given good governance through exemplary performance."
"With her astute leadership, she has transformed Tamil Nadu into a strong, progressive and prosperous State. Our people, who are well aware of this will not be swayed by any false propaganda (by Opposition)," he said.
"Like the mythological bird Annam which is capable of separating water from milk, our people can differentiate good and bad and they will deliver the correct judgement at the right time," he said as the state is set to go to polls soon.
"I am confident that they will ensure that our Chief Minister gets another resounding victory in the coming election and that our journey to take forward the State's development continues," he said.
While giving a background to budget resources and fiscal indicators, he said slow rate of tax growth seen in the previous two years continued in 2015-16 as well especially in commercial taxes, he said.
The drastic fall of international crude oil prices and consequent reduction in the sales tax realisation on petro products has reduced the State tax revenue by Rs.4,000 crore per annum, he said.
Citing the Centre increasing excise duty on petrol and
diesel thereby augmenting its revenue, the minister said, "though all our neighbouring states have increased the sales tax on petrol and diesel to compensate their loss in sales tax, this government has not resorted to such a move."
"Further, the reduced share in central devolution, delay in reimbursement of grants-in-aid from government of India in addition to reduced Central share in centrally sponsored schemes have caused strain on the state finances," he said.
However, expenditure had been kept under control, he said. Despite constraints on revenue receipts, the overall fiscal deficit, net borrowings and debt-GSDP ratio will be in the permissible limit, he said.
"Even though the state is entitled for budgetary borrowing of Rs 37,782 crore it has been restricted to Rs 35,129 crore in the interim budget estimates," he said.
"The state government has been taking all necessary steps to put the economy back on the growth path."
Revenue deficit for 2015-16 (revised estimate) was Rs 9,481.14 crore and for 2016-17 it was Rs 9,154.78 crore. Pannerselvam did not propose any new taxes.
In the medium term fiscal plan placed before the House as part of the budget, the government said the State economy was showing signs of recovery.
The recovery was evident from GSDP growth rate of 7.25 per cent in 2014-15 as against 3.39 per cent in 2012-13 at 2004-05 constant prices.
"It is estimated at 9.13 per cent in 2015-16 at 2011-12 constant prices. It is expected that the economy will further pick up during 2016-17. Based on this, it is estimated that the state economy would revive and achieve high growth rate in the next year."
Revenue receipts under commercial taxes has been pegged at Rs 72,326.45 crore with a growth of 11.69 per cent over the revised estimates 2015-16.
Meanwhile, the opposition, including the main opposition party DMDK, DMK and the left parties, boycotted the budget presentation by staging a walkout after trying to raise some issues.
