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The Tamil Nadu government on Thursday announced its Budget for 2018-19, with strategies to tackle the major challenges faced by the State.
The challenges include attracting investments, creating more jobs, improving farm productivity and farmers’ income, urban development and upgrading basic amenities and infrastructure.
The economy needs to be steered ahead in a hazy environment following demonetisation and GST implementation, said State Finance Minister O Paneerselvam, who presented the Budget.
The revenue deficit is expected to be ₹17,491 crore and fiscal deficit ₹44,481 crore, he said.
The pace of economic growth in Tamil Nadu has picked up in FY18, and will continue to improve in FY19, he said. The State’s GDP is expected to grow at 8.03 per cent in FY18. As the economic outlook of the State is favourable, the sustained investments made by the government in the primary sector, and the measures taken to boost industrial investment, may result in over 9 per cent economic growth in FY19, he added.
GST impact
Panneerselvam, who is also the State’s Deputy CM, said that from July 2017 to February 2018, Tamil Nadu has received ₹632 crore as GST compensation from the Centre. The State will stand to gain from GST in due course, since the gap between projected revenue with 14 per cent growth rate and actual revenue has been shrinking considerably over these eight months, he added.
The fiscal deficit to GSDP ratio is estimated at 2.79 per cent as per the Budget Estimates, which is well below the 3 per cent fiscal norm. The implementation of the Seventh Pay Commission recommendations resulted in an additional commitment of ₹14,719 crore per annum in salaries and pensions, and thus increased the burden on the State’s finances.
Fiscal deficit to GSDP ratio will be 2.76 per cent in 2019-2020 and 2.57 per cent in 2020-2021, he said.
On governance, Paneerselvam said an integrated Tamil Nadu Makkal Portal will be launched which will serve as a one-stop gateway for public to access and update data related to them.
The State government will also introduce the Tamil Nadu State Aadhaar Bill in this Budget session to ensure prompt and timely delivery of public services. The e-Governance policy has already been released by the Government. A Government wide Architecture for e-Governance will be conceptualised and put in place, he said.
Better future
The State’s economy is slowly picking up which is evident from the increase in GSDP growth rate in real terms, from 4.85 per cent in 2012-2013 to 8.03 per cent in 2017-2018 despite temporary setbacks.
Despite these constraints, overall Fiscal Deficit, net borrowings and outstanding debt-GSDP ratio will be within permissible limits. The State Government will continue to take concerted efforts for faster economic recovery, which will pave way for enhancing State’s fiscal position and improve fiscal consolidation, Paneerselvam said.
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