TN manages tax-free budget, power is theme

Chennai, March 21: The Jayalalithaa Government in Tamil Nadu today presented a tax-free budget, apparently with an eye on next year's Lok Sabha elections and emphasis was on power.

Finance Minister O Panneerselvam who presented the budget proposals in the Assembly repeatedly blamed the Union government for shortfall in revenue.

Extending the current debate on the Sri Lankan Tamils' welfare, coverage under Chief Minister's Comprehensive Health Insurance Scheme will be extended to Lankan Tamils living outside the refugee camps also, he said.

But he made it clear that the budget was prepared in the backdrop of "gloomy national economic scenario" and "waning investor confidence." The recent Union budget "reveals absolutely no commitment on the part of the Union Government towards achieving the twin objectives of reversing the economic downtrend and controlling inflation," he said.

J Jayalalithaa and Panneerselvam

The state government was already "feeling the pinch" of slowdown as seen in lower growth of GSDP which according to Advanced Estimates was 4.61 per cent at constant prices.

Panneersevalm said the state's share in central taxes Panneersevalm said the state's share in central taxes had "drastically reduced," by over Rs 500 crore with Central Government "once again missing the target of budgeted receipts."

"The severe drought and crop failure has hit us badly in the primary sector, which has ultimately affected service sector growth as well. The general economic slowdown in the national economy and shortage of power has hampered growth in the manufacturing sector," the Minister said in his Budget speech.

"Inspite of pressures for vital expenditure and serious resource constraints, the Chief Minister has decided that, against the backdrop of slow growth of the Indian economy in general and its possible repercussions on state's economy in particular, no new tax will be imposed, nor will any existing tax rate be hiked in this budget," he said.

For the year, the government had pegged the state's own tax target at Rs 86,065.40 crore with the bulk of it expected from commercial taxes, Excise Duty and Motor Vehicles tax at over Rs 56,000 crore.

During 2013-14, the projected revenue surplus would be Rs 664.06 crore while fiscal deficit would be Rs 22,938.57 crore. "The fiscal deficit will be 2.84 per cent of Gross State Domestic Product (GSDP), which is well within the stipulated norm of three per cent," he said.

Slowdown in the economy had affected tax growth in the state where investement sentiments,especially in manufacturing sector, "has taken a beating," Panneerselvam said.

Power is top of the agenda

He said the budget estimates for 2012-13 had projected a revenue surplus of Rs 2,376 crore but it was revised to Rs 451.52 crore owing to 'increased expenditure commitments.

This was mainly due to efforts to revive the financial health of electricity utility TANGEDCO (Tamilnadu Generation and Distribution Corporation Ltd) and "substantial reduction in receipts from the Government of India."

Further, to tide over the acute power shortage across the state, various power projects would be commissioned between May 2013 and March 2014, which would add 3,230 mw, he said.

"As already announced, works related to the newly launched power projects-- Ennore extension for 660 MW, Ennore-SEZ for 2 x 660 MW and Udangudi for 2 x 660 MW at a total investment of Rs 21,000 crore will commence during 2013-2014," he added.

Panneerselvam said the Chief Minister has approved a Financial Restructuring Plan for TANGEDO under which 50 per cent of the Rs 12,211 crore of short-term liabilities of the company will be taken over by the government.
The state government made the "highest ever" allocation of Rs 5,189.15 crore to agriculture sector for 2013-14, up from the Rs 4,829.93 crore in the current year.

The Tamil Nadu Government will "continue to implement the Universal PDS "irrespective of the outcome of the Food Security Bill" and allocated Rs 4,900 crore towards providing free rice to ration card holders, he said.

Oneindia News

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