State expects increase in outlay

CHENNAI, NOV. 29. The Chief Minister, Jayalalithaa, will lead a delegation to New Delhi on Tuesday for a meeting with the Planning Commission to finalise the annual plan outlay for Tamil Nadu for 2005-06. For the current year, it is Rs. 8,001 crores.

After a dismal beginning in 2001, when the All-India Anna Dravida Munnetra Kazhagam came to power, there was a steady increase in the outlay for the succeeding years.

Because of a huge fiscal crisis, the Government voluntarily pruned the plan for the first year and then began stepping up the outlay. From just Rs. 5,250 crores in the first year, it climbed to Rs. 8,001 crores for the current year.

Considering that the outlay for 2003-04 was Rs. 7,000 crores, a similar increase in the annual plan size for 2005-06 is anticipated, in addition to any special assistance the Government may seek.

Provisional estimates

Provisional estimates of the Government indicate that 36.03 per cent of the outlay was utilised by various departments in the first half of the year (see graphics for details). Government sources say it takes the almost the first quarter to complete the allocation to ministries and departments, which will then release funds for each project or programme. Viewed in that context, utilisation of more than one-third of the plan outlay in the first half-year is considered "satisfactory." But they also concede that during the last quarter, some departments realise they cannot fully spend allocations and may surrender some funds. The second and third quarters are usually the "most active period" for expenditure.

In sectors for which the allocation is lower, the utilisation seems to be higher, going by the record of the first six months. For instance, under general economic services, 72.12 per cent of Rs. 66 crores had already been utilised.

In the social services sector, 46.05 per cent of Rs. 2958.10 crores was disbursed till September 30.

Plan target

The Government is confident of achieving this year's plan target as the financial and fiscal indices of the first half-year have been "encouraging." In a review of the trends, the Finance Minister, C. Ponnaiyan, noted that the total revenue receipts till September 30 constituted 50.50 per cent of the budget projections. "Pre-actuals" in the share of Central taxes were 49.86 per cent, in the State's own tax revenues these were 52.10 per cent and in the State's non-tax revenues, 54.13 per cent. Only in grants-in-aid from the Centre, these were 31.82 per cent.

"It is expected that State excise receipts will go up in the second half of the financial year, with payment of dues of the special privilege fee by the Tamil Nadu State Marketing Corporation. The receipts under State's own tax revenue have shown an overall growth of 19.85 per cent over the previous year (for the first six months).

Revenue buoyancy

Given the general buoyancy in revenues and a hold on expenditure, the Government appears confident of meeting its targets set under the Medium-Term Fiscal Plan and the Tamil Nadu Fiscal Responsibility Act 2003. The target is to bring down the revenue deficit below 5 per cent of total revenue receipts and the fiscal deficit to 3 per cent of the Gross State Domestic Product by March 2008. Despite the spate of concessions and additional commitments the Government took on this year, with Rs. 1434.48 crores in two supplementary estimates, the authorities still feel that the deficit levels set for the year can be met — a target of 13.46 per cent in revenue deficit on total revenue receipts and 3.86 in fiscal deficit.

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