Tamil Nadu Deputy Chief Minister and Finance Minister O. Panneerselvam presented the interim Budget ahead of the State elections.
Here are the highlights:
Interim budget estimates for 2021-22, State GST revenue: Rs. 45,395.50 crore, VAT: Rs. 56,413.19 crore, State Excise Duty: Rs. 9,613.91 crore
Tamil Nadu expected to raise Rs. 84,686.75 crore as net debt in 2021-22, against the overall permissible limit of Rs. 85,454 crore
While some part of reduction in share of Central Taxes is attributable to impact from COVID-19, the shrinking of the divisible pool of Central taxes and increase in the share of cesses and surcharges of Central taxes is also a significant factor, says Mr. Panneerselvam.
The Covid-19 pandemic has necessitated additional expenditure of Rs. 12,917.85 crore primarily for health and relief related expenditure
With the COVID-19 pandemic, the State Own Tax Revenue (SOTR) collapsed in the first four months of the current financial year due to the lockdown and the additional time provided for remittance of tax dues, says Mr. Panneerselvam.
The collection of State GST and Value Added Tax started to pick up from August 2020. The collection of stamp duty and registration fees has also revived. However Motor Vehicle Tax Collection yet to fully recover, he says.
The share of Central taxes for Tamil Nadu, which had been indicated in the Union Budget at Rs.32,849.34 crore in their Budget Estimates 2020-21, has been reduced to Rs.23,039.46 crore in the Revised Estimates 2020-21, he says.
Rs. 6,683 crore allocated for Coimbatore Metro project
Rs 7,217 crore allocated for fisheries in Tamil Nadu Interim budget
Computer Science subject will be taught to Students from 6th to 10th standard, says O Paneerselvam
Tamil Nadu Finance Minister allocates Rs 9,567 crore for the police department in his interim budget
Tamil Nadu government to procure 12,000 new buses
The number of fire stations at Sivakasi, the fireworks hub of India will be increased
‘Increase in spending for health’
Owing to COVID-19 pandemic and an increase in spending for health and relief, the total revenue deficit in 2020-21 is estimated to be Rs. 65,994.05 crore, a substantial increase from Rs. 21,617.64 crore projected in the Budget Estimates ’20-21, Mr. Panneerselvam says.
TN’s GSDP as per Revised Estimates 20-21 is at Rs. 19.43 lakh crore. Estimated to increase to Rs. 23.42 lakh crore in 21-22.
Tamil Nadu’s GSDP has been projected at 2.02%
Tamil Nadu’s overall debt is estimated to be Rs. 5.70 lakh crore as on March 31, 2022. It is estimated to be Rs. 4.85 lakh crore as on March 31, 2021, says Mr. Panneerselvam.
State’s Own Tax Revenue is estimated to be Rs. 1.09 lakh crore in the Revised Estimates 2020-21, a decrease of Rs. 23,561 crore in the Budget Estimates. This is estimated to increase to Rs. 1.35 lakh crore in 2021-22, he says.
Tamil Nadu’s GSDP has been projected at 2.02% for 20-21 at constant prices, he says.
‘Centre should merge cess, surcharge with tax’
In his budget speech, O. Panneerselvam calls on the Central Government to merge cesses and surcharges with the basic rate of tax so that States receive their legitimate share of revenue.
TN’s fiscal deficit expected to widen to Rs. 96,889.97 crore in the Revised Estimates for ’20-21. A rebound in revenue receipts is expected in 2021-22, he says.