Budget deficits seen rising in FY24, 19% growth seen in state’s own tax revenue
The Tamil Nadu government on Monday presented the budget for 2023-24 in the state assembly, focusing on infrastructure growth, urban development and welfare measures for common people.
Delivering the Budget speech, state finance minister Palanivel Thiaga Rajan reaffirmed the resolve to achieve zero revenue deficit and follow the fiscal glide path, but asserted that welfare initiatives and developmental priorities won’t be compromised.
The Budget pegged the fiscal deficit for 2023-24 at a realistic 3.25% of gross state domestic product (GSDP), up from 3% in 2022-23 (revised estimate). The states’ own tax receipts are seen to grow at 19% on year. The revenue deficit is estimated at 1.32% in 2023-24, as against 1.23% (RE) in the current financial year.
“Notwithstanding the several massive welfare schemes that are being implemented during the last two years, owing to the unprecedented and difficult reforms undertaken, we have reduced the annual revenue deficit of around Rs.62,000 crore which we inherited on assuming office, to around Rs 30,000 crore in the Revised Estimates of the current year. It is noteworthy that this is approximately Rs.5,000 crore lower than the level of the pre-COVID year of 2019-20,” Thiaga Rajan said.
He added that in view of the revenue augmentation measures including improvement in collection efficiencies and rate rationalisation, the revenue deficit is expected to reduce further to Rs 18,583 crore in 2024-25 and subsequently lead to a surplus of Rs 1,218 crore in 2025-26. This will create additional space for capital expenditure in the state, the minister said.
In the Budget, the government has given a further push to the capital expenditure, with allocation of Rs.44,366 crore in 2023-24, up 15.7% over the Revised Estimates for the current fiscal. The total capital outlay of the State including Net Loans and Advances is estimated at Rs.54,534 crore.
The total revenue receipts of the state are estimated to be Rs 2,70,515 crore in budget estimates of 2023-24 as against the revised estimates of Rs 2,45,659 rore in 2022-23. The state’s own tax revenue (SOTR), which accounts for 70% of total revenue, is expected to increase to Rs 1,81,182 crore in 2023-24. In the coming year, the state’s non-tax revenue is estimated at Rs 20,223 crore, which is an increase of 32.1% over the revised estimates.
The revenue expenditure is estimated at Rs 3,08,056 crore for 2023-24, an increase of 11.56 % over revised estimates of 2022-23.
The government has announced reduction in registration fee from 4% to 2% for land buyers will boost demand for land and reduce the overall acquisition cost. This in turn will reduce the final project cost. It has proposed to set up TN Tech City in Chennai, Coimbatore and Hosur which will help meet the rising infra requirements of the state and place it on the global map for IT hubs.
Integrated projects for planned development will be launched for Coimbatore and Madurai and rural roads covering more than 5,140 km will constructed at cost of Rs 2,000 crore.
The government will also launch ‘North Chennai Development’ initiative at an estimated cost of Rs 1000 crore for uniform development in the city.
In the energy sector, the pumped storage hydroelectric projects will be established under PPP mode to meet the peak hour power demand in the state. The 500 MW pumped hydroelectric storage project being constructed at Kundah will be operational by 2024-25. Further, 15 more projects will be established under the PPP mode with a total capacity of 14,500 MW at an estimated cost of Rs 77,000 crore by 2030. The government will bring out a comprehensive policy to promote investment in pumped hydroelectric storage in the state.
Giving emphasis to textile sector, the FM said acquisition of 1,052 acres of land for setting up the mega textile park at a cost of Rs 1,800 crore in Virudhunagar district has been completed by SIPCOT. This park which is being established with the support of the Union Government will provide employment to 2 lakh persons and the works are expected to commence soon. Further, a new Textile Policy will be released with a focus on holistic development of the entire value chain, latest design development and textile machinery manufacturing.
The state government has allotted a sum of Rs 10,000 crore towards Chennai Metro Rail project in the budget. The work on phase-II of the Chennai Metro Rail project for a length of 119 km in three corridors at a total cost of Rs 63,246 crore were in progress. The first stretch of elevated corridor from Poonamallee depot to Kodambakkam Powerhouse section is expected to be ready for commissioning by December, 2025. The state government has also decided to implement the Metro Rail project in Coimbatore city at an estimated cost of Rs 9,000 crore.
It will also implement Metro Rail project in Madurai at an estimated cost of Rs 8,500 crore. After obtaining approval from the Centre, the Metro Rail projects in these two cities will be implemented with funding from external agencies
Source:financialexpress.com