It is an inclusive TN Budget crafted amidst tough situation: T Udhayachandran
It is notable that this is lesser than the revenue deficit excluding loss funding to TANGEDCO as compared to the Budget Estimates 2023-24
T Udhayachandran; TN Finance Minister Thangam Thennarasu presented the State's Budget for 2024-25.
CHENNAI: Finance Secretary T Udhayachandran on Monday said the 'inclusive' budget for the fiscal year 2024-2025 catering to the benefit of all sections of the people was aimed at balancing the fiscal deficit. He exuded confidence that the state would see a better graph in the coming years as the State's own tax revenue (SOTR) is estimated to increase by 14.7% in 2024-2025, in particular the revenue through registration and motor vehicles, which are "encouraging".
The budget was prepared amidst tough challenges and twin natural disasters that impacted the state's fiscal deficit. It was "carefully drafted" to benefit all sections of the people, the finance secretary told the journalists.
Expressing concern over the loss of funding to TANGEDCO to the tune of Rs 17,117 crore as mandated by the Union Government, he said it was a cause of concern. It has an adverse impact on the state's fiscal deficit. "Since there is a delay from the Union Government in giving its nod to the phase II metro project, the state borne the entire expense of Rs 9,000 crore and it has to allocate Rs 12,000 crore for the project in the coming fiscal year. We are hopeful the Union government gives its nod for the project, reducing the financial burden of the state, " said the finance secretary.
Non-disbursement of the share from the Union government for the Chennai Metro Rail project and the twin natural disasters - cyclone Michaung in Chennai and surrounding districts and unprecedented rains in southern districts - have impacted the state's fiscal deficit, he said.
It is notable that this is lesser than the revenue deficit excluding loss funding to TANGEDCO as compared to the Budget Estimates 2023-24
The state would be placed better if the centre released its due share and grants, including around Rs 11,000 crores from Cess and Surcharge, he said, reasoning that the Union government is yet to give its nod and its share of funds for the phase II of Chennai Metro Rail project.
However, the state government has taken multiple initiatives with support of technologies to tackle the challenges, besides plugging the leakage of funds and utilizing the same effectively in welfare schemes and capital investments.
In line with the recommendations of the 15th Finance Commission, the Government is following the "glide path of fiscal consolidation" and has reduced it from 3.46 per cent in 2022-23 to 3.45 per cent in 2023-24 to 3.44 per cent in 2024-25, he noted.
"We have undertaken a lot of reform measures and the benefits of it will be realized in the next financial year. It will help achieve our targets. We have roped in IIT Hyderabad and constituted a special task force to monitor the flow of the funds. At a time, it can monitor one lakh accounts, " he said and added that the government has adopted the Tamil Nadu Public Fund Tracking System. It has been implemented for 36 major schemes in 13 departments to track the flow of funds till it reaches the end beneficiary.
The state economy is going well. The inflation is low and the growth rate is high when compared to the nation's trend. The government is sustaining this by investing more in capital expenditure, youth development and welfare schemes, he said and pointed out that the revenue deficit is expected top reduce to Rs 18,098 cr in 2025-2026 and subsequently lead to a surplus of Rs 5,966 cr in the following year.
