Apart from the anticipation of an announcement on the monthly honorarium of ₹1,000 for women family heads, measures to achieve the goal of making the State revenue-neutral in three years would be keenly watched in the Tamil Nadu Budget for 2023-24 to be presented by Finance Minister Palanivel Thiaga Rajan on Monday.
Campaigning for the Erode (East) Assembly byelection, Chief Minister M.K. Stalin had said an announcement in respect of the ₹1,000 monthly dole would be made in the Budget. This scheme was one of the key election promises of the ruling DMK.
Mr. Thiaga Rajan had said at an event that the State’s finances had improved through reforms and the aim was to become revenue surplus in two to three years. He had said Tamil Nadu’s revenue deficit (the difference between the government’s revenue receipts and revenue expenditure) was brought down by ₹16,000 crore in 2021-22. As a result, the fiscal deficit (the difference between the total revenue and expenditure excluding borrowings) was at 3.38% of the Gross State Domestic Product in 2021-22, as per the final accounts, which was lower than the 3.85% limit set by the Union government.
The Finance Minister had stated that Tamil Nadu would repeat the good performance in 2022-23 and had taken measures to safeguard against any recession.
As per the provisional figures of the Comptroller and Auditor-General of India (CAG), Tamil Nadu’s total revenue receipts in fiscal 2022-23 (till January 2023) was ₹1,82,620.78 crore, 78.92% of the budgeted estimate of ₹2,31,407 crore for 2022-23.
The total revenue receipts include the State’s Own Tax Revenue, the State’s Own Non-Tax Revenue, Tamil Nadu’s share in the Central Taxes and Grants-in-Aid from the Centre.
The State’s Own Tax Revenue (SOTR), which accounts for 70% of the total revenue receipts, was ₹1,15,422.52 crore this fiscal till January 2023. The budgeted amount for SOTR is ₹1,42,800 crore for 2022-23. The SOTR has increased, driven by the economic recovery after the COVID-19 pandemic.
Mr. Thiaga Rajan had told the Assembly that the government would try to improve tax collection and curtail leakages to achieve the SOTR target set in the 2022-23 budget estimates.
The Union Budget has increased the amount to be received by Tamil Nadu as a share of the Central Taxes to ₹38,731.24 crore in 2022-23, which is higher than the ₹33,311 crore budgeted by the State for 2022-23. For 2023-24, the State’s share of Central Taxes has been put at ₹41,664.86 crore, higher than the revised estimate for 2022-23.
Till January 2023 this fiscal, the State’s revenue expenditure was ₹2,00,431.07 crore, as against the budgeted ₹2,84,188 crore. The revenue expenditure was 16.2% more than ₹1,7,24,21.40 crore incurred in 2021-22 (till January 2022) due to a higher expenditure on account of salaries, pensions and interest payments.
The revenue deficit till January 2023 this fiscal was ₹17,810.29 crore, compared with the budgeted amount of ₹52,781 crore for 2022-23, while the fiscal deficit was ₹44,761.32 crore, as against the budgeted ₹90,114 crore.
So far in fiscal 2022-23, Tamil Nadu has borrowed ₹85,000 crore, compared with ₹75,490 crore last year, according to ratings firm ICRA Ltd. The States can roll over the remaining borrowing capacity from last year in 2022-23.
For 2023-24, the Union government has allowed the States’ fiscal deficit to be 3.5% of the GSDP, out of which 0.5% will be tied to power sector reforms. Mr. Thiaga Rajan has said the government is committed to maintaining fiscal deficit within the prescribed limit.
