Finance Minister O. Panneerselvam asserted on Thursday in the Assembly that the State’s financial position was strong enough to fulfil its commitments of debt repayment and interest payment.
Replying to the debate on the budget, the Minister said interest payment as a proportion of the State’s own tax revenue was one of the important indicators of the State’s fiscal health. Ten years ago, during 2003-2004, it was 20.97 per cent. During 2013-2014, it would be 11.45 per cent.
Pointing out that Tamil Nadu was one of the least debt-stressed States in the country, he said that as per the norms of the Central Finance Commission, the debt to Gross State Domestic Product (GSDP) ratio should be within 25 per cent. By the end of 2013-2014, it would be 19.18 per cent.
Though the State’s eligibility to raise net public borrowing was Rs. 20,716 crore during 2012-2013, the government went in for only Rs. 15,675 crore. There was nothing wrong to take loans per se. But, what mattered were the level of debt and the purpose for which debt was used, he added.
Growth
Referring to doubts as to whether the government would be able to achieve 17 per cent growth rate in State’s Own Tax Revenue (SOTR), the Minister said that despite the current position of economic slowdown, the State achieved 21.8 per cent growth rate, as on January end. Under such circumstances, the projected rate of 17 per cent was correctly assessed and it was realisable.
He also clarified that the estimated GSDP growth rate of 4.61 per cent for 2012-2013 was based on constant prices whereas projections of revenue receipts were determined on the basis of current prices.
Mr. Panneerselvam emphasised that despite the adverse impact of economic slowdown, the State budget had been prepared, without resorting to reduction in allocation for ongoing schemes and levy of additional taxes. Compared to the budget estimate of Rs. 1,20,422 crore for 2012-2013, the revised estimate had been hiked to Rs. 1,21,666 crore.
On the Central share in the State’s Plan allocation during the 12th Plan period (2012-2017), the Minister told the House that the annual outlay for 2012-2013 was Rs. 28,000 crore, of which the Central share was Rs. 3,473.48 crore. Likewise, for 2013-2014, against the overall outlay of Rs. 37,000 crore, the share of the Centre accounted for 9.83 per cent or Rs. 3,636.18 crore.
