The State budget for 2018-19 will be tabled in the Tamil Nadu Legislative Assembly on March 15 when it convenes for the next session. This will be the State’s first budget after the rollout of the Goods and Services Tax.
Deputy Chief Minister O. Pannerselvam, who got back the finance portfolio after the two AIADMK factions merged last year, will present the budget at 10.30 a.m. on March 15.
In 2017, Fisheries Minister D. Jayakumar took charge as Finance Minister and presented his maiden budget, following the rebellion of Mr. Panneerselvam against the Edappadi K. Palaniswami-led government.
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The government has already warned that revenue deficit for 2017-18 would be higher than its earlier forecast of ₹15,930 crore, mainly on account of the implementation of the 7th Pay Commission recommendations. This is likely to be the fifth straight year of revenue deficit for the State. Implementation of the 7th Pay Commission is likely to result in an additional outgo of ₹6,480 crore. Last year, the State breached the fiscal deficit norm of 3% as it joined the UDAY scheme and took over nearly ₹22,815 crore of Tangedco’s debt.
Under the GST regime, most of the taxes have been subsumed except for registration and stamp duty, levy on sale of liquor, and tax on petrol and diesel. The State has claimed robust collections under the GST.
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Revenue from Tasmac
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While shutting down a large number of Tasmac shops, the government raised prices of liquor. Revenues, however, were impacted by the Supreme Court’s ban on the sale of liquor on State and National Highways.
Registration and stamp duty collections also were under stress. Against this backdrop, how the government manages to balance between spending on freebies and keeping the fiscal deficit in check will be keenly watched.