CHENNAI: Belying general expectations, the last full-fledged budget of the AIADMK government was presented on Friday without any populist measure. Struggling to make both ends meet with the available resources, Deputy Chief Minister O Panneerselvam presented a revenue-deficit budget for 2020-21 wherein debt burden of the State government is estimated to touch Rs 4.56 lakh crore by next March.
However, Finance Secretary S Krishnan described the budget as a “growth-oriented and realistic one” which has made significant allocations for capital expenditure. He asserted that the debt level has been contained within the norms. In the same vein, Panneerselvam pointed out that Tamil Nadu had withstood fierce global and national level economic headwinds.
Painting a rosy picture for economy of the State in the forthcoming years, Panneerselvam said, “The growth rate of Tamil Nadu in the current financial year is projected to be 7.27 per cent, which is higher than the national level growth rate of 5 per cent.” He exuded confidence that the State would register even stronger growth performance in 2020-21. Admitting that Tamil Nadu continues to see sustained increase of its revenue deficit, Panneerselvam attributed this to the burden imposed on State finances by the takeover of debt and losses of TANGEDCO under the UDAY scheme; the lag effect of implementation of the Seventh Central Pay Commission and the slower growth in tax revenue both at the Centre and the State.
Panneerselvam also made new announcements for various sectors which included a five-year CM’s Rural Self Sufficiency Development Programme for local bodies, launching of Not-For-Profit Special Purpose Vehicle to finance and manage the Amma Unavagam Scheme, starting Chennai City Partnership as a unique model of development cooperation with the World Bank to ensure continued sustainable growth of metropolitan Chennai, fitting CCTV cameras in all buses to ensure safety of women, eight agro processing clusters at a cost of Rs218 crore, developing the Ponneri Industrial Node of the Chennai-Bengaluru Industrial Corridor (CBIC) on an area of 21,966 acres in Tiruvallur district, gender budget statement with an outlay of Rs78,796.12 crore towards women and launching of Tamil Nadu State Child Policy.
Estimated fiscal deficit at Rs59,346.29 crore
While the revenue receipts for the next financial year is estimated at Rs2.19 lakh crore, the revenue expenditure is estimated at Rs2.4 lakh crore leaving a revenue deficit of Rs21,617.64 crore for the government. The fiscal deficit is estimated at Rs59,346.29 crore and the estimated outstanding debt on March 31, 2021 is Rs.4.56 lakh crore.
“In order to finance the fiscal deficit during 2020-21, it is estimated that Rs59,209.30 crore will be raised as net debt against the overall permissible borrowing limit of Rs62,757.80 crore. So, the net outstanding debt at the end of March 31, 2021 is expected at Rs4,56,660.99 crore and debt to GSDP ratio will be 21.83 per cent which is well within the norm of 25 per cent,” Panneerselvam pointed out. Last year, he had projected the debt burden to go up to Rs3.97 lakh crore.
Significantly, Deputy Chief Minister O Panneerselvam also announced in his budget presentation that the government would provide land and a corpus grant of Rs5 crore to Madras School of Economics (MSE) headed by former Governor of RBI, Dr C Rangarajan to establish a Centre for Public Finance in Chennai.
Total allocation stands at Rs 11,894 crore. Eight agro processing clusters at a cost of Rs 218 crore will be established in as many districts.
Amma Unavagams will turn into ‘food on wheels’ with Chennai Corporation purchasing 50 trucks from Rs 100-crore allocation.
An outlay of `78,796.12 cr proposed for women. Rs 959 cr allotted for maternity scheme and Rs 726 cr for marriage assistance scheme.
Ponneri Industrial Node of Chennai-Bengaluru Industrial Corridor will be developed at a cost of Rs 32,713 crore in Tiruvallur district.