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TN fiscal deficit at 3.44% in FY25, growth anticipated: State finance secy | Economy & Policy News

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“The government is following the gliding path of fiscal consolidation and has reduced it from 3.46 percent in 2022-23 to 3.45 percent in 2023-24 to 3.44 percent in 2024-25,” he said | Photo: Pexels

Tamil Nadu’s fiscal deficit in the Budget Estimates for 2024-25 stood at 3.44 per cent of the GSDP despite a decline in the State’s Own Tax Revenue (SOTR) due to two successive natural calamities in December 2023 resulting in additional expenditure, State Principal Secretary-Finance T Udhayachandran said on Monday.

The SOTR suffered a revenue loss due to cyclone Michaung and unprecedented rains in the southern districts. The state government had to spend more on flood relief, provide immediate relief measures besides initiate long-term relief measures, he said.

“This budget has been prepared under this financial stress…Nevertheless, Tamil Nadu’s economy is robust. We expect a 15 per cent growth in our SOTR through the Commercial Taxes Department,” Udhayachandran told reporters here.

The Registration department did not see the expected growth last year but next year the government hoped that it would fetch more revenue to the state, he added.

Briefing the media on the Budget Estimates for 2024-25 presented to the Assembly by state Finance Minister Thangam Thenarasu, Udhayachandran said in total, the fiscal deficit was estimated at Rs 1,08,690 crore in the Budget Estimates, which is 3.44 percent of the GSDP. This was in line with the recommendations of the 15th Finance Commission.

“The government is following the gliding path of fiscal consolidation and has reduced it from 3.46 percent in 2022-23 to 3.45 percent in 2023-24 to 3.44 percent in 2024-25,” he said.

The SOTR stood at Rs 1,95,173 crore with the Commercial Taxes department accounting to Rs 1,43,381 crore, stamp and registration: Rs 23,370 crore, state excise: Rs 12,247 crore, and the motor vehicle department: Rs 11,56 crore. Including the state own non-tax revenue (of Rs 30,728 crore) Grant-in-aid from the centre (of Rs 23,354 crore), share in central taxes (Rs 49,55 crore), and others, the total receipts stood at Rs 2,99,010 crore.

The sale of vehicles was satisfactory and the four-wheeler sales including the luxury segments have increased more than the two-wheeler segment.

He said the government was taking all steps to increase the revenue and simultaneously taking concerted steps to prevent tax evasion.

Tamil Nadu’s inflation of 5.96 per cent was under control compared to the national average of 6.65 per cent. The capital expenditure for 2023-24 was Rs 42,532 crore and 2024-25 would see the state spend Rs 47,681 crore for infrastructure development, especially Chennai metro rail development, he said.

The Central tax share declined from 6.6 per cent to 4.08 percent and the grant in aid from the centre too decreased by the year.

Further, the move to provide a monthly grant of Rs 1,000 to government school boys to pursue higher education would entail the government an expenditure of Rs 511 crore per annum, the Finance secretary said.

Earlier, in his Budget speech, Thenarasu, said “on one hand, the coastal State of Tamil Nadu has been frequently affected by natural disasters; on the other hand, the state is being meted out step-motherly treatment by the Union Government, which has completely forgotten the principles of co-operative federalism.”

The ideals of rationalist “Periyar” Ramaswamy and late Chief Ministers C N Annadurai and M Karunanidhi have been the guiding force in preparing this Budget, which aimed to propel Tamil Nadu’s growth and development amidst these challenges, the Minister added.

First Published: Feb 19 2024 | 4:53 PM IST


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