The economic recession was responsible for lower revenue receipts of the State government during the first half of the financial year 2009-2010, Chief Minister M. Karunanidhi clarified on Saturday.

Responding to All India Anna Dravida Munnetra Kazhagam general secretary Jayalalithaa's statement that against the actual figure of Rs. 24,432 crore, the receipts should have been at least Rs. 29,135 crore as on September 30, 2009 given the budget estimates of Rs. 58,271 crore for the entire year, Mr Karunanidhi said the government, in its document submitted to the Assembly, had explained this also.

One of the major reasons for the decline in the receipts and the increase in fiscal deficit was the Centre's host of concessions to industry for overcoming the recession. Even as per the revised estimates for 2009-2010, the deficit was 3.23 per cent of the Gross State Domestic Product (GSDP) as against four per cent allowed by the Union government. So, there was no need to be concerned over the deficit issue.

As for the issue of revenue deficit raised by Ms Jayalalithaa, the Chief Minister replied that the increase of revenue deficit from the budget estimate of Rs.1,024 crore to the revised estimate of Rs. 5,020 crore for 2009-2010 was due to factors such as the implementation of recommendations of the Sixth Pay Commission, increase in the outlay for welfare schemes and the allotment for new schemes, he said, citing the budget papers.

He also added that as per the budget estimate for 2010-2011, the revenue deficit would go down to Rs.3,396 crore.

On the AIADMK leader's criticism that the budget was prepared with an eye on the Assembly elections, Mr Karunanidhi said this only meant a number of schemes had been mentioned in the budget.