After slump, Tamil Nadu state gravy train to soon gather pace

CHENNAI: The DMK government, which took the reins in 2021, when the revenue deficit was hovering around Rs 62,000 crore, is on its way to achieve zero-revenue deficit. Finance minister Palanivel Thiaga Rajan on Monday said he has brought down the revenue deficit by around 52% to Rs 30,000 crore in the revised estimates for 2022-23. He said the state would adopt a smooth glide path to achieve a zero-revenue deficit without compromising on welfare activities and developmental priorities.

TN’s growth is higher than that of the national GDP and this is expected to continue in the coming year though a global economic slowdown is anticipated, said PTR, while presenting the budget for 2023-24. The outstanding debt is expected to rise to Rs 7,26,029 crore by March 31, 2024, but this will be well within the norms prescribed by the 15th Finance Commission.

During the ensuing financial year, the state is planning to borrow Rs 1,43,198 crore, he said. “The revenue deficit for 2023-24 is estimated at Rs 37,540 crore. In view of revenue augmentation measures, including improvement in collection efficiencies and rate rationalisation, the revenue deficit is expected to reduce to Rs 18,583 crore in 2024-25 and subsequently lead to a surplus of Rs 1,218 crore in 2025-26.

This will create additional space for capital expenditure,” said PTR. Similarly, the fiscal deficit is estimated at 3.25% of GSDP. In the coming years, the fiscal deficit to GSDP ratio is estimated to be 3% in 2024-25 and 3% in 2025-26, which is within the norms. The minister stressed the government had achieved this improvement despite increasing interest costs, and the stringent barriers imposed on TN’s fiscal administration by the Centre.