CHENNAI: The state government has introduced a bill to amend the Tamil Nadu Fiscal Responsibility Act 2003 to extend the time limit set to eliminate revenue deficit by 2025-26 and reduce fiscal deficit by 3% of Gross State Domestic Product by March 31, 2025.
The earlier time limit set was 2023-24. Similarly, the target to reduce the fiscal deficit by 3% of Gross State Domestic Product was March 31, 2024. This comes after the 15th Finance Commission in its report for 2021-25 recommended an extra borrowing space for states of the magnitude of 0.50% of Gross State Domestic Product performance criteria in power sector.
The commission has also recommended fixing the net borrowing limit to Gross State Domestic Product at 4%, 3.5% and 3% for 2021-22, 2022-2023, and 2023-24 to 2024-25 and to avail unutilised borrowing amount in any of the subsequent years, if the state is unable to fully utilise the borrowing limit during the first four years of the award period.