DMK government presents tax-free budget

Chennai, Jul 22: The DMK government today presented a tax-free budget with a revenue deficit of Rs 1,129 crore for the year 2006-07.

Presenting the maiden budget of the new government, which assumed office on May 13, Finance Minister K Anbazhagan said the total revenue receipts were estimated at Rs 38,731 crore and total revenue expenditure in the revised budget estimates was projected at Rs 39,860 crore.

This would result in revenue deficit of Rs 1,129 crore, which was 2.9 per cent of total revenue receipts, he said.

The capital expenditure including loans and advances was projected at Rs 6,102 crore, resulting in fiscal deficit of Rs 7,231 crore for the current financial year.

The fiscal deficit projected in 2006-07 would be within three per cent of the Gross State Domestic Product, which was in line with the targets set under Tamil Nadu Fiscal Responsibility Act, 2003, he said.

This fiscal deficit would be financed through net borrowing of Rs 7,453 crore. Taking into account the Public Account (net) and Contingency Fund (net), the overall deficit for the financial year 2006-07 was estimated at Rs four crore, he said.

This deficit would be covered by economy in expenditure and better tax administration without imposition of any new taxes, Mr Anbazhagan added.

Mr Anbazhagan announced abolition of sales tax on pulses and oil, involving a revenue loss of Rs 110 crore, reduction of general sales tax from eight to four per cent and four to two per cent to benefit tea growers, abolition of sales tax on yank yarn, exempt inter-state sale of waste paper and abolition of re-sale tax. He said as on March 31, 2006, the government had inherited a huge debt liability of Rs 56,094 crore and to take care of the interest commitment for the huge debt stock, the government would have to earmark resources to the tune of Rs 446 crore every month.

''Still, this government has undertaken this development oriented budget in the interest of the welfare of the people of Tamil Nadu,'' he said, adding the budget was a compilation of schemes thoroughly thought and formulated in such a manner that the people, belonging to all strata, would welcome it.

Mr Anbazhagan said the government resolved to ensure corruption free and transparent administration. An administrative reforms committee comprising experts from various fields would be constituted to make recommendations for removing red tape, which was the basic cause for delay and corruption in the government offices.

UNI