Tamil Nadu’s revenue deficit to decrease after eight years: Finance Minister PTR

Presenting the Budget for 2022-23, Tamil Nadu Finance Minister PTR Palanivel Thiaga Rajan on Friday said the state’s revenue deficit will decrease by over Rs 7,000 crore for the first time since 2014 and fiscal deficit down to 3.80 per cent from 4.61 per cent despite unprecedented floods and the Covid-19 pandemic.

However, the state’s total outstanding debt will increase to Rs 6.53 lakh crore as of March 31, 2023, as against 5.7 lakh crore as of March 31, 2022, as the net public debt for the incoming financial year is projected at Rs 90,116.52 crore. The Debt-GSDP ratio will stand at 26.29 per cent, which is “within the limits” set by the 15th Finance Commission, the minister said.

Thiaga Rajan, a former top banker who has worked with many global financial institutions, attributed the “application of political will and administrative skill” by the government to the reversal in the trend. The revenue and fiscal deficit of the state increased each passing year since 2014 with the DMK blaming “financial mismanagement” by the previous AIADMK regime for the decline.

“This year, Tamil Nadu will see a reduction in the absolute level of the Revenue Deficit by over Rs.7,000 crore, reversing an alarming trend of increasing deficits every year since 2014. Further, we are poised to see a significant reduction of the Fiscal Deficit, from 4.61% down to 3.80% even during such a challenging year,” Thiaga Rajan said.

Also read: Tamil Nadu govt presents Budget, AIADMK stages walkout

He said the demonstration of such “sound financial management” increases Tamil Nadu’s stature in both the financial markets and amongst global corporates. Principal Opposition AIADMK staged a walkout and termed the Budget has “letting down” the people.

Among the announcements, one that caught everyone’s attention was the scheme aimed at increasing the enrolment ratio of girl students from government schools in higher education for which Rs 698 crore was allotted. Thiaga Rajan said the government will transfer Rs 1,000 every month to the bank accounts of the students who studied 6th to 12th standard in government schools till “uninterrupted continuation” of their UG, diploma and ITI courses.

To encourage students from rural areas to study in premier institutions like IITs, IIMs and AIIMS, the Finance Minister said the government will bear the “full cost” of the undergraduate education of students who have studied in government schools from 6th to 12th standard. The government also allotted Rs 5 crore to publish social reformer E V R Periyar’s written work in 21 Indian and world languages to spread his progressive ideas.

Though there was some good news on the fiscal management side, the Budget fell short of expectations as it did not provide any relief to people by reducing prices of diesel and petrol as promised in the DMK’s election manifesto. The promise of reducing petrol price by Rs 5 was partially fulfilled when Rs 3 was reduced in 2021.

While there was no mention of the promise to provide Rs 100 subsidy each to six LPG cylinders to families, the Finance Minister postponed disbursal of Rs 1,000 a month to women heads of households as their “rightful money” until the “financial situation improves.” However, the minister said work is in full swing to identify the eligible beneficiaries from various databases and design the scheme in a manner that the benefits reach the deserving.

While contending that the battle for social justice is still “only half-won” despite “significant advances”, Thiaga Rajan said the government will continue to remain steadfast in its determination to achieve social justice in all walks of life.

Thiaga Rajan said the budget was prepared with a vision outlined by Chief Minister M K Stalin to keep in mind not just the present, but the future, including “generations of Tamils yet unborn.” The Finance Minister, in the course of his speech, expressed deep concern at the “persistent attempts” to erode the federal architecture of the polity and demanded extension of GST compensation by two years from June 30, 2022, due to a slew of factors including Covid-19 pandemic.

The School Education Department got the highest allotment of Rs 36,895 crore, which includes a Rs 7,000 crore project named after Dravidian ideologue and M Karunanidhi’s second-in-command K Anbazhagan to modernise government schools, while the outlay for Health stood at Rs 17,901.73 crore, less than what was allotted in 2021-2022. The Tamil Development Department received Rs 82.86 crore while Rs 500 crore was allotted for flood prevention works.

As Chennai and the state is prone to sudden natural disasters, the Finance Minister announced the establishment of an advanced early warning system with supercomputers, a system of weather balloons, two weather radars, and 100 automatic weather stations, among others at a cost of Rs 10 crore.

The minister also announced the setting up of a Special Social Media Centre to prevent the increasing crimes resulting from fake news. He also announced a Rs 20 crore scheme “Vallalar Palluyir Kappagangal” to support NGOs that take care of abandoned and injured pet animals and strays.

A botanical garden at a cost of Rs 300 crore near Chennai, setting up of the Tamil Nadu Green Climate Change Fund, several new roads in and around Chennai and elsewhere are some of the other announcements. The Finance Minister also announced that the East Coast Road (ECR) connecting Chennai with Puducherry will be made into a six-lane.

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