Chennai: The Tamil Nadu government today blamed the Centre for its “failure” to stimulate growth, which it said had an adverse impact on the state’s economy and investments for the second successive year.
“While the state government has been striving hard to ensure equitable growth, the failure of the Government of India to stimulate growth and improve the failing macro-economic environment continues to adversely impact the investments and economic growth consecutively for the second year,” Finance Minister O Panneerselvam said while presenting the Budget for 2014-15 in the state assembly.
He said that the continued economic stagnation has caused a substantial shortfall in the state’s projected tax revenues.
“Though there are signs of revival, with the state’s economic growth expected to exceed five percent during 2013-14, massive efforts are needed to stimulate the economy to put it back on the path of accelerated growth,” he said.
As a ‘positive sign,’ the power situation has improved significantly and “industrial growth is showing recovery,’ he added.
The government was taking all efforts to create a more congenial environment for increasing economic growth, besides stepping up state investment in critical sectors.
“Further, with the proposed investment of Rs 42,185 crore under Plan schemes during 2014-15, Plan Expenditure will cross Rs 1.07 lakh crore as against the overall 12th Plan target of Rs 2.11 lakh crore,” he said.
Central government has decided to channelise funds for Central Plan schemes, hitherto routed through Special Purpose Vehicles outside the Consolidated Fund of the state, through the state budget in future.
“This will ensure better resource management and accountability,” he added.
Presenting the mandatory Medium Term Fiscal Plan (MTFP)along with the budget, Panneerselvam said its objective was to balance the need for developmental and fiscal prudence.
Fund requirement for various purposes including large number of welfare schemes were to be met through the state’s ‘limited resources’ but the government was committed to achieving fiscal consolidation by complying with roadmap set by the 13th Finance Commission, he said.
MTFP ensures that the goals of fiscal prudence for the period 2014-17 — maintaining revenue surplus and keeping fiscal deficit within 3 per cent of GSDP (Gross State Domestic Product) — are complied within the period and thereafter, Panneerselvam said.
“Debt as a percentage of GSDP will be maintained well below the norms of 25.2 per cent in 2014-15 fixed by the 13th Finance Commission,” he said.
Total revenue receipts were estimated at Rs 1,27,389.83crore in 2014-15. With steps in place to improve efficiency in tax collection and expansion of tax base besides good tax compliance, scope for additional revenue generation was very less, he said.
“The states’s Own Tax Revenue is Rs 83,363.21 crore as perRevised Estimates 2013-14. It is estimated to increase to Rs91,835.35 crore in Budget Estimates for 2014-15. This would mean a growth of 10.16 per cent,” Panneerselvam said.
Non-tax revenue was estimated at Rs 8,083.98 crore while that of share in Central taxes was Rs 19,014.23 crore.Grants-in-aid from centre were estimated at Rs 8456.27 crore while taking into account various plan grants, non-plan grants and grants recommended by the 13th Finance Commission.
Revenue Expenditure was estimated at Rs 1,27,100.47 crorefor 2014-15, “which shows a growth of 9.04 per cent over revised estimates 2013-14.” Salaries (Rs 35,720.86 crore) and pension (Rs 16,020.63 crore) were the key components; while for subsidies and grants, allocation was over Rs 49,000 crore.
Proposing a “major thrust” to capital expenditure in 2014-15,allocation has been increased from Rs 21,887.10 crore in revised estimates 2013-14 to Rs 26,003.67 crore, he said.
The government estimated revenue surplus for 2014-15 at Rs289.36 crore, he said, adding surplus will be maintained in 2015-16 and subsequent year also. Fiscal deficit was Rs 25,714.31 crore and this would form 2.73 per cent of the GSDP and it will decrease to 2.70 per cent next year and to 2.67 per cent in 2016-17, he said.
While government’s borrowing limit is estimated at Rs 28,267 crore for 2014-15, the state plans to restrict it, and the net borrowings during the period is pegged at Rs 25,000.22 crore, he said.
“The outstanding public debt including provident fund will be Rs 1,78,710.76 crore as on March 31, 2015. This will only constitute 18.91 per cent of GSDP,” he said.