Chennai, March 19 (IANS) Tamil Nadu Finance Minister K. Anbazhagan Friday presented a deficit budget with no additional tax for the financial year 2010-11.
"The total revenue receipts of the government for 2010-11 are estimated at Rs.63,091.74 crore and the total revenue expenditure is estimated at Rs.66,488.19 crore. Accordingly, the revenue deficit is estimated at Rs.3,396.45 crore," he said while presenting the budget in the assembly.
He said the implementation of the Sixth Pay Commission recommendations was the main reason for the deficit.
The total capital expenditure, including loans and advances (net), for the coming financial year was projected at Rs.12,825.68 crore. The projected fiscal deficit will be Rs.16,222.13 crore.
"This would constitute 3.7 percent of the Gross State Domestic Product (GSDP). Taking into account the net Public Account, the overall deficit will be Rs.8 crore," he said, adding that the deficit would be lowered by cutting expenditure and through better tax administration.
Declaring that the state had achieved all the targets set by the central government regarding revenue and fiscal deficit in the last four years, Anbazhagan said: "The fiscal deficit for the year 2010-11 is permissible as per the recommendations of the 13th Finance Commission."
According to the Medium Term Fiscal Plan (MTFP) presented alongwith the budget, implementation of the Sixth Pay Commission recommendations, the increasing expenditure on various existing and new welfare schemes and the slowdown in revenue growth due to global economic meltdown, Tamil Nadu will have a revenue deficit of Rs.5,019.54 crore and fiscal deficit of Rs.12,860.45 crores in 2009-10.
In the coming financial year also (2010-11), the Pay Commission arrears have to be paid and the state is again expected to be in a revenue deficit of Rs.3,396.45 crore.
Further, due to the high level of capital expenditure planned by the government, the fiscal deficit will be Rs.16,222.13 crore and fiscal deficit-GSDP ratio is expected to be 3.72 percent. This is as per the recommendations of the 13th Finance Commission.
According to the MTFP, the state has been very careful in managing its debt. The outstanding debt of the government as on 31.3.2009, which includes liabilities like the provident fund, has been Rs.74,858 crore. The increase in debt in the three-year period from 2006-07 to 2008-09 has been Rs.17,401 crore.
"The total capital expenditure during the same period has been Rs.22,519 crore showing that the mobilised debt has been utilised for productive purposes. The debt-GSDP ratio of the government at the end of 2009-10 will be 23 percent," the MTFP states.
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