Chennai, Jun 16 (PTI) The Tamil Nadu government on Tuesday said despite numerous fiscal challenges, it was committed to delivering upon its promises as early as possible when the financial position permitted.
Expressing concern over numerous financial challenges, including a cap on state’s borrowings, limited central funding and rising expenditure in terms of salaries and pension for government employees, a white paper on fiscal management of Tamil Nadu 2021-22 to 2025-26, said the present financial condition was “very bleak.” “However, it is not hopeless. Much can be achieved in increasing the revenues of the state by plugging the leakages and corruption in the revenue-collecting departments that have resulted in subduing the growth of revenue receipts
in the last few years,” the document released by Finance Minister N Marie Wilson at the Secretariat here today said.
A lot can be done in improving the delivery of services and works by reducing the costs of procuring goods and works by reducing leakage, and mobilising additional resources without imposing fresh burden on the citizens. “It is going to take a long gruelling effort to do so,” it said.
The fiscal situation has put the state government in a very tight spot and posed a severely challenging situation. The government will work diligently on increasing revenues and delivering on its promises as the additional revenues flow in, it said.
It noted that financing was tightly constrained. The maximum borrowing the state could realistically expect was about Rs 1.52 lakh crore, which was already insufficient to cover committed obligations, leaving minimal space for new programmes and a residual funding gap.
The estimate for Grants-in-Aid from the Union Government was projected at Rs 24,762 crore against pre-actuals of Rs 18,078 crore. It assumes grants under Samagra Siksha Abhyan at Rs 5,000 crore, which seems unlikely given the stance of the Union Government on imposing the three-language formula as a pre-condition for release of the grants, it said.
Even if the expected reduction in the Grant-in-Aid from the Centre was ignored and 12 per cent optimistic growth in the State’s Own Tax Revenue is assumed, the consequential Revenue Receipts are over-projected under ‘Business-As-Usual’ scenario by close to Rs 14,000 crore.
Salaries and pensions have been estimated at Rs 1,39,701 crore, against the pre-actual of 2025-26 at Rs 1,22,065 crore, which is fairly well estimated in the BAU scenario.
Expenditure under the head Subsidies and Transfers has been estimated at Rs 1,56,108 crore against the pre-actuals of Rs 1,62,536 crore. Loss funding to TNPDCL has been of the order of Rs 16,000 crore every year for the last 3 years and has been completely omitted in the interim budget estimates under revenue account.
There will be an outgo of Rs 11,800 crore per annum on account of payment to TNPDCL for settling the regulatory assets (accumulated losses of TNPDCL on account of fixation of lower tariffs) as per Supreme Court directions. Taking this into account, the Subsidies and Transfers are under-provided by an amount of Rs 27,800 crore. PTI JSP JSP KH
