On track to meeting deficit targets
: Despite the continuance of various welfare measures, rise in dearness allowance for government staff and the mid-year increase in allocation for schemes such as the Kalaignar Housing Scheme and Indira Awaas Yojana (IAY), the government says that the State's finances are stable.
Emphasising that the government is on track to meeting the targets of revenue deficit and fiscal deficit for the current year, K. Shanmugam, Principal Secretary (Finance), says that the revenue deficit-total revenue receipts (TRR) ratio is likely to be 5.38 per cent and fiscal deficit-Gross State Domestic Product (GSDP) ratio 3.72 per cent. As per the latest norms, it is only during the next financial year – 2011-2012 – that revenue deficit should be brought down to nil and fiscal deficit to three per cent.
“As per our revised projections, our revenue receipts will go up by nearly Rs. 3,000 crore. This is due to a host of factors including the additional devolution of funds expected from the Centre and a steep rise in revenue through stamps and registration fees,” the Principal Secretary says.
He explains that the anticipated additional devolution is because of revenue buoyancy in the wake of the hike in rates of Central excise and customs duties in petroleum and non-petroleum products early this year. The revenue through the levy of stamps and registration fees during April-August, 2010 showed nearly 30 per cent growth over the corresponding period of the previous year.
A few of the welfare measures including food and power subsidy, old age pension, noon meal scheme and the Kalaignar Health Insurance Scheme for Life Saving Treatment will cost the government around Rs. 12,200 crore this year.
The list includes the revised allocation of Rs.2.250 crore for the Kalaignar Housing Scheme and the State's share in the IAY of Rs. 425 crore.
The DA hike made in September costs the exchequer an additional Rs. 2,190 crore a year.
No tax revision
Mr Shanmugam points out that the revised estimate of the increase in revenue receipts will be offset by the additional revenue expenditure, which will also be to the tune of Rs. 3,000 crore. He also notes that there has been no revision in tax rates of the State government.
Giving figures of the revenue receipts recorded during April-August, the official says that the sum of the proceeds of sales tax, State Excise and stamps and registration fee was about Rs. 17,345 crore against the projected figure of Rs. 41,438 crore for the entire year.
As of now, the State received from the Union government Rs. 3,715 crore towards its share of Central taxes and Rs. 2,568 croretowards grants-in-aid.