TN Budget 2024: Charges that Delhi is impeding the prosperity of the state Thangam Thennarasu

CHENNAI: On Monday, Thangam Thennarasu, the finance minister for Tamil Nadu, said that the federal government was restricting the State by placing onerous restrictions on the borrowing cap. According to him, this has limited the State’s capacity to generate money to support its development projects.

Presenting the State Assembly with the budget for 2024–25, the Finance Minister said that “the imposition of stringent conditions on the borrowing ceiling by the Union Government has unduly restricted the ability of the State to raise resources to fund its development initiatives.”

The Minister said that due to the Union Government’s excessive delay in sanctioning the Chennai Metro Rail Project, the State was compelled to use its budgetary resources to cover all project costs up to this point, incurring expenses of Rs. 9,000 crore for the current year.Additionally, since June 30, 2022, the GST compensation system has been terminated, there has been an annual income deficit of around Rs. 20,000 crore. In March of last year, the budget for the year 2023–24 was submitted, despite the difficult conditions.

According to Thennarasu, the assault of twin calamities this year has made matters worse and put a significant burden on public budgets. There has been a notable decrease in income collections notwithstanding unexpected expenses spent to carry out both temporary and permanent repair works and to give the required monetary relief assistance. The Union Government has not given the State any assistance from the National Disaster Response Fund in spite of several pleas.

The minister went on to say that the Tamil Nadu government has been ordered to provide TANGEDCO with loss funding of Rs. 17,117 crore this year as a result of the condition set forth by the GOI; if this is not done, the equivalent amount will be subtracted from the borrowing cap set by the Union government. Furthermore, in the next year, a sum of Rs. 14,442 crore must be allocated for loss financing. Even while the government is dedicated to reforming the electricity industry, this requirement places a heavy financial load on the government and limits its capacity to support development projects. Thus, our Government has written to the Union Government to have this sum removed from the State’s Fiscal Deficit and Borrowing Ceiling in accordance with the Ujwal Discom Assurance Yojana (UDAY) Scheme.

Thangam Thennarusu, the Finance Minister of Tamil Nadu, TN Budget 2024: The government ignores voting rights, courts youth, and marginalizes
Under these conditions, the total revenue expenditure is anticipated in the Revised Estimates 2023–24 at Rs. 3,17,484 crore, whereas the Budget Estimates are at Rs. 3,08,056 crore. The Minister said that even though revenue expenditure increased by Rs. 15,594 crore due to losing financing to TANGEDCO and Rs. 2,041 crore for disaster relief and restoration, the rise was kept to Rs. 9,428 crore by careful fiscal management.

Regarding revenues, the expected amount collected from the State’s Own Tax Revenue in the Revised Estimates 2023–24 is Rs. 1,70,147 crore, compared to Rs. 1,81,182 crore in the Budget Estimates. Due to the significant effect of natural disasters, this represents a decrease from the projected growth levels of 20.61 percent in the Budget Estimates to 13.26 percent in the Revised Estimates.

The Revised Estimates 2023–24 project the State’s Non-Tax Revenue at Rs. 30,381 crore, a significant increase above the Budget Estimates. This is the outcome of the revenue augmentation initiatives implemented by this government, which also included improving the efficiency of collecting and rationalizing rates.

The grants-in-aid and share of central taxes are among the transfers from the Union government. The Revised Estimates 2023–24 have the Grants-in-aid at Rs. 26,996 crore, a little less than the Budget Estimates. Compared to the Budget Estimates of Rs.41,665 crore, the Share in Central Taxes has risen to Rs.45,053 crore in the Revised Estimates 2023–24. The Union Government’s forecast of higher tax receipts is the cause of the rise in the Revised Estimates.

Compared to the Budget Estimates of Rs.37,540 crore, the total revenue deficit in the Revised Estimates 2023–24 is predicted to rise to Rs.44,907 crore. The income shortfall is projected to be Rs. 27,790 crore in the Revised Estimates 2023–24, as opposed to Rs. 36,017 crore in the Budget Estimates, excluding lost financing to TANGEDCO. This has been accomplished in spite of the negative effects that the catastrophes have had on income and expenses via good budgetary management.

According to the Revised Estimates 2023–24, the Fiscal Deficit would rise slightly to Rs. 94,060 crore from the Budget Estimates of Rs. 92,075 crore. Due to a negative adjustment in the GSDP forecasts, the Fiscal Deficit as a percentage of GSDP rose from 3.25 percent in the Budget forecasts to 3.45 percent in the Revised Estimates 2023–2024.

Thangam Thennarusu, the finance minister for Tamil Nadu, predicts that the state’s debt would reach Rs. 8.33 lakh crore by 2025 and guarantees fiscal sustainability.
With the state’s economy growing, taxes being revised, and collection efficiency improving, the State’s Own Tax Revenue has been anticipated in the Budget Estimates 2024–25 at Rs. 1,95,173 crore, up 14.71% from the Revised Estimates 2023–24. This comprises a total of Rs. 12,247 crore from state excise, Rs. 11,560 crore from motor vehicle taxes, Rs. 23,370 crore from stamps and registration, and Rs. 1,43,381 crore from commercial taxes. An sum of Rs. 30,728 crore has been predicted in the Budget Estimates 2024–25 in expectation of sustained levels of collection from the State’s Own Non-Tax Revenue.

In comparison to the Revised Estimates 2023-24, there is a decrease in Grants-in-Aid in the Budget Estimates 2024-25 owing to the total termination of GST compensation dues in the next year. The projected amount of the grants-in-aid is Rs. 23,354 crore. The estimates set for Share in Central Taxes for the year 2024–25 are Rs. 49,755 crore, based on the provision announced in the Union Budget 2024–25.

According to the Budget Estimates 2024–25, the overall expected fiscal deficit is Rs. 1,08,690 crore, or 3.44% of the GSDP. The government is implementing the glide path of fiscal consolidation in accordance with the recommendations of the 15th Finance Commission. It has decreased it from 3.46 percent in 2022–2023 to 3.45 percent in 2023–2024 and 3.44 percent in 2024–2025. This has been accomplished in spite of the effects of calamities and after an exceptional budgeted resource allocation to TANGEDCO. This Budget highlights the Government’s resolve to fulfill its commitments to the People, despite many obstacles, by remaining steadfast on the road of responsible budgetary management.