Amid monetary constraints and forward of the Lok Sabha elections, Tamil Nadu Finance Minister Thangam Thennarasu introduced the State Budget for 2024-25. He says the Budget catered to aspirations of each section, sector and area of Tamil Nadu and in addition spoke concerning the formidable targets. Excerpts from an interview with The Hindu.
This was your first finances — what are the ideas that went into this Budget whereas planning?
During the discussions on the Budget Estimates of 1967-68, the then Finance Minister Perarignar Anna had remarked “The lives of 3.5 crore people are determined by the 64 pages in this Budget. We have poured our heart and soul into the Budget. It contains the aspirations and dreams of the people who elected us”.
These profound remarks of Arignar Anna have been the guiding rules for me on this Budget.
With the fixed assist and steerage of the Hon’ble Chief Minister, I’ve strived to meet the goals and aspirations of hundreds of thousands of Tamil folks, whereas persevering with to tread on the trail of fiscal prudence.
Given that is an election yr, was the concentrate on fiscal consolidation or populist measures? Was it a acutely aware determination to not make any massive bulletins? Most of the bulletins have been extension of current schemes?
No. This just isn’t really appropriate. We have launched the ‘Kalaignar Kanavu Illam’ to supply protected and everlasting concrete homes to eight lakh poor households in rural areas, at a unit price of ₹3.5 lakh. In its first part, we now have deliberate to take up one lakh homes, with a monetary implication of ₹3,500 crore. This is the biggest rural housing programme undertaken by any State within the nation, with out the assist of the Union authorities.
In this Budget Session, the Chief Minister has additionally introduced the much-needed Housing Repair Scheme, the place we’ll present ₹2 lakh per family to restore of dilapidated homes constructed with authorities help previous to 2001. This widely-appreciated initiative shall be carried out at a value of ₹2,000 crores.
For the primary time within the nation, we now have launched a scheme, ‘Tamil Pudhalvan’, for offering monetary help to boys. Under this scheme, roughly three lakh boys, who’re at present pursuing larger training and have studied in authorities colleges from Class sixth to twelfth, shall be supplied ₹1,000 per 30 days for his or her every day wants.
The listing is lengthy and I can go on for a while.
I’m proud to tell you that this Budget has catered to the aspirations of each section, sector and area of our State. This Budget underscores the dedication of this authorities to ship on the guarantees made to the folks. At the identical time, we now have not deviated from the trail of fiscal consolidation, despite the quite a few challenges thrown at us by the Union authorities. In phrases of each the fiscal deficit and the excellent debt-to-GSDP ratio, we’re performing higher than the earlier yr.
The floods have impacted the State’s Own Tax Revenue in 2023-24. You have forecast a 14.71% progress in 2024-25. Given that floods have been a typical prevalence and the existence of a worldwide slowdown, don’t you assume the estimates are on a better aspect?
Considering there was a revision in taxes on motor automobiles, liquor and registration through the present yr (2023-24), and several other technological efforts are being undertaken to plug leakages, I imagine the expansion fee could be very cheap.
How a lot of revision in taxes bought mirrored within the revised State’s Own Tax Revenue estimates for 2023-24?
The improve in excise obligation on liquor has taken impact in February 2024. So, we solely have one month to understand the income assortment on the brand new charges within the present yr. Taking under consideration this revision, a progress of 12.38% has been estimated for 2024-25. The revision in motorcar taxes was been effected in November 2023. This has resulted in a rise in collections, owing to which there was an upward revision within the Revised Estimates to ₹9,229 crore from the Budget Estimates of ₹8,782 crore.
You have cited the unprecedented loss on account of funding Tangedco and funding the metro rail mission out of personal assets as causes for improve in income deficit to ₹44,907 crore within the revised estimates for 2023-24. In 2024-25 the income deficit is estimated to be ₹49,278.73 crore and anticipated to scale back to ₹18,098 crore in 2025-26? Given the constraints, don’t you assume the 2025-26 goal is formidable?
The 2025-26 determine may be discovered within the Medium-Term Fiscal Plan, which is a statutory doc mandated below the Act to put down the plan and forecast for the approaching years. The Total Revenue Receipts are estimated to develop at 14.33% in 2025-26, which is a good assumption as I’ve defined earlier.
The dedicated liabilities together with salaries, pension and curiosity funds have been projected to extend at 9.5%, which is according to the expansion of 9.6% within the final 5 years. The main lower may be seen within the expenditure on Subsidies and Transfers due to the discount in Loss Funding to Tangedco. The situation of gross loss funding to Tangedco is tied to the extra borrowing house of 0.5% supplied to State governments. This borrowing window will finish in 2024-25 and will probably be unfair on the a part of the Union authorities to power us to supply the loss funding even after that. We have additionally addressed the Union authorities to exclude loss funding from the calculation of Fiscal Deficit, on traces of the UDAY Scheme.
As I’ve talked about a number of instances throughout my speech and the reply, the federal government is offering an unprecedented quantity of loss funding to Tangedco within the present yr. Excluding the loss funding to Tangedco, the Revenue Deficit within the Revised Estimates for 2023-24 shall be ₹27,790 crore. This can be a discount of ₹8,227 crore as in comparison with the Budget Estimates 23-24, regardless of the onslaught of two disasters. In the Budget Estimates 2024-25, the Subsidies and Transfers (excluding loss funding to Tangedco) are estimated at ₹1.32 lakh crore. In the yr 2025-26, this determine has been estimated at ₹1.40 lakh crore. Given these figures, I’m positive you could discover the determine of ₹18,098 crore for Revenue Deficit as formidable however not unachievable.
You additionally maintain the electrical energy portfolio. One of the explanations for the State’s excessive debt stage is Tangedco. You have kicked off reforms by unbundling and making a inexperienced firm. What are the opposite measures you’re looking at?
Apart from unbundling and creation of a brand new inexperienced firm, there are a selection of reforms which are lined up. We are making a concerted effort to include our expenditure. At current, 80% of the expenditure comes from energy era and procurement. We plan to fee three new energy vegetation inside the subsequent two years in order to scale back our dependence on energy buy from the market. We are additionally working to enhance the effectivity in operations by discount in the usage of imported coal and oil in energy vegetation. We are utilizing expertise together with Artificial Intelligence and Machine Learning to forecast electrical energy demand and optimise our energy buy. We are within the course of of putting in sensible meters to plug income leakages. We are working in the direction of discount of AT&C losses by conversion of excessive loss-making feeders into HVDS (High Voltage Distribution System). We additionally plan to discover the opportunity of debt restructuring in order to swap our high-cost loans with cheaper debt, thereby considerably lowering our curiosity funds.
Your expectations from the sixteenth Finance Commission? The Union Finance Minister Nirmala Sitharaman has claimed the Centre just isn’t discriminating towards any southern State in sharing Taxes, following the suggestions of the fifteenth Finance Commission. She mentioned the State could make its case to the sixteenth Finance Commission, if it feels aggrieved.
We have made our stance clear on a number of fora. There has been a scientific try and deprive Tamil Nadu from its due share in Central Taxes.
In the newest launch of devolution by the Union authorities, you’ll discover that the sum complete of the devolution acquired by all of the 5 southern States mixed is ₹22,455 crore. In comparability to this, the devolution to the State of Uttar Pradesh alone is ₹25,495 crore. These figures are for all to see and assess for themselves.
The sixteenth Finance Commission has been constituted not too long ago below the ready management of Arvind Panagariya. We are hopeful that the historic injustice meted out to progressive States resembling Tamil Nadu shall be addressed, and Tamil Nadu will get its legit share commensurate to its contribution to the nation. We will current our case, supported by proof and info, to the Commission.
How lengthy are you able to maintain with a income deficit state of affairs, on condition that assets are required for the important thing welfare schemes and in addition expenditure required for wage and pension?
The income deficit contains the expenditure on salaries, pensions and welfare schemes. The authorities has, is, and shall proceed to fulfil its bounden obligation to supply the mandatory allocation to fund its dedicated liabilities.
The capital expenditure for 2023-24 has been revised downwards because of influence of floods and once more a better progress has been projected for 2024-25. But there was a pattern of capital expenditure being revised downwards, every time there’s a larger income deficit state of affairs?
I don’t assume I can reply for earlier years.
In the present yr, there was a discount in capital expenditure owing to an antagonistic influence attributable to the 2 calamities. Further, there was a acutely aware effort to make sure just-in-time launch of funds in order that idle money just isn’t mendacity within the financial institution accounts of implementing companies. This has resulted in a lower within the quantity of capital expenditure being booked within the yr.
In the Budget Estimates 2024-25, we now have projected a progress of 12.11 % in capital expenditure. We are dedicated to growing the capital expenditure within the State as is clear within the large-scale sanctions on metro tasks, mixed water provide schemes, roads and bridges, and infrastructure for training and well being.
The Hut-Free Tamil Nadu scheme by 2030 appears to be an formidable mission. Even although housing board schemes exist already, folks don’t transfer in there and as an alternative let it out for lease. Is there a plan to implement this? Also, how many individuals lives in huts throughout all of the districts in Tamil Nadu?
You know that the Tamil Nadu Housing Board and Tamil Nadu Urban Habitat Development Board serve the city poor. But, ‘Kanavu Illam’ scheme is supposed for the agricultural poor. And the involved division has performed an in depth survey throughout the State to evaluate the hut dwellers. I can guarantee you that this additionally shall be a data-driven mission.
It has been said that the federal government will take proactive steps to make sure that training loans to the tune of ₹2,500 crore are sanctioned and disbursed by varied banks to at least one lakh school college students within the coming yr. The banks have their very own formulation for disbursing loans – on this situation, how is the State authorities planning to attain this goal?
First of all, I want to point out that training loans type part of the precedence sector lending targets of the banks, which they’re mandated to attain. We have been continuously reviewing the efficiency of banks on this regard.
In our expertise, the credit score disbursement for instructional functions has each demand-side and supply-side constraints. On one hand, the scholars should not have the enough data and the means to use for loans; then again, the banks should not capable of give the loans because of lack of correct paperwork and an absence of enough incentive mechanism.
In order to handle these points, the federal government has determined to type a brand new District Credit and Livelihood Management Agency, below the chairmanship of District Collector, which can act because the nodal company accountable for coordinating actions between candidates, banks and different developmental companies. Further, to supply the mandatory fillip to banks, the federal government will hyperlink their efficiency in instructional credit score to the empanelment for presidency business. We hope to attain this goal within the coming yr.
Source: www.thehindu.com
