Ahead of polls Tamil Nadu presents tax free budget

RSTV Bureau
Tamil Nadu FM O Panneerselvam presenting the budget in assembly in Chennai, TN on 16.02.2016 (Photo Courtesy TN Govt.)

Tamil Nadu FM O Panneerselvam presenting the budget in assembly in Chennai, TN on 16.02.2016 (Photo Courtesy TN Govt.)

Ahead of assembly elections this year, Tamil Nadu Finance Minister O Panneerselvam today presented a tax-free interim budget for 2016-17 and pegged the revenue deficit at Rs. 9,154.78 crore which is 5.68% of the total revenue expenditure of the state. Tamil Nadu’s fiscal deficit is pegged at 2.92% of the state GDP which is below the target set by the 14th finance commission.

Presenting the budget in the ongoing last session of the 14th Assembly, he said the revenue deficit was unavoidable. “The huge revenue deficit is unavoidable due to falling state’s own tax revenue especially the sales tax revenue from petroleum products.”

Total revenue receipts have been estimated at Rs 1,52,004.23 crore, total revenue expenditure at Rs 1,61,159.01 crore and revenue deficit at Rs 9,154.78 crore.

“When the state is implementing unique schemes like green houses, free distribution of fan, mixer, laptops, such revenue deficit is unavoidable,” he said.

In the revised estimates for 2015-16, fiscal deficit was estimated at Rs 32,359.59 crore which was 2.94 per cent of Gross State Domestic Product and for 2016-17 it has been projected at Rs 36,740.11 crore, he said.

“The fiscal deficit to GSDP ratio has been contained to 2.92 per cent which is well below the limit prescribed by the 14th Finance Commission.”

While giving a background to budget resources and fiscal indicators, he said slow rate of tax growth seen in the previous two years continued in 2015-16 as well especially in commercial taxes, he said.

The drastic fall of international crude oil prices and consequent reduction in the sales tax realisation on petro products has reduced the State tax revenue by Rs.4,000 crore per annum, he said.

(With inputs from agencies).