Tamil Nadu is expected to register a positive growth rate of 2.02 per cent at 2011-12 constant prices in 2020-21 as against an All India negative growth rate of 7.7 per cent for the current fiscal.
Meanwhile, the State has asked the Centre to merge cesses and surcharges with the basic rate of tax so that States receive their legitimate share of revenue.
While presenting the interim Budget today, Tamil Nadu Deputy Chief Minister and State Finance Minister, O Panneerselvam, attributed the strongest performance among states to the primary sector, which grew at 5.23 per cent, with the livestock and fisheries sectors faring even better. Growth in the secondary sector is 1.25 per cent and in the services sector it is 1.64 per cent. This significantly better-than-expected growth in 2020-21 is due to the expeditious and effective measures taken by the Tamil Nadu Government to tackle the pandemic, Panneerselvam said.
"I have no doubt that in 2021-22, the growth performance will be even stronger," he added.
Additional Chief Secretary to the Government of Tamil Nadu, S Krishnan, expects the State to report double-digit growth next fiscal.
Krishnan said that due to the Government efforts industries have also started quickly in the State. Exports and services sectors, especially, have also managed to start quickly and growing strongly.
"We expect a bounce back and double digit growth by next year," said Krishnan, adding that the interim budget don't have any new revenue streams or new schemes. The focus has been managing finance as efficiently as possible, ensuring that all the welfare schemes are funded, continuing the capex so that give a boost to the economy.
The State Government has incurred a total expenditure of around Rs 13,352.85 crore on the Covid-19 pandemic response.
The State which is gearing up for assembly election in the next few months made a provision of Rs 5,000 crore for the crop loan waiver scheme. In the interim Budget a provision of Rs 11,982.71 crore has been made for Agriculture.
The other major focus has been education, healthcare, infrastructure, public distribution system, industries, development of local bodies among others
As far as subsidy concerned, a major portion of it will go towards electricity, food and for students, said Krishnan.
The interim budget, which was presented today, reflected a significant impact from Covid-19 on the finances.
The State Own Tax Revenue is expected to be Rs.1,09,968.97 crore in the Revised Estimates 2020-21 which represents a drop of 17.64 per cent as against Rs.1,33,530.30 crore anticipated as revenue in the Budget Estimates 2020-21.
Panneerselvam said due to COVID-19 pandemic and an increase in spending for health and relief, the total revenue deficit in 2020-21 is revised to Rs. 65,994.05 crore, up from Rs. 21,617.64 crore projected in the Budget Estimates 2020-21.
""The COVID-19 pandemic has caused a sharp drop of revenue, but the expenditure levels had to be enhanced to protect people's welfare. Hence, it is completely unavoidable that the Government had to resort to borrowings resulting in a higher fiscal deficit", he said.
The Covid-19 pandemic has necessitated additional expenditure on the revenue account of Rs. 12,917.85 crore primarily for health and relief related expenditure, said Panneerselvam.
On the whole, the fiscal deficit in the Revised Estimates 2020-21 is expected to widen to Rs.96,889.97 crore which is 4.99 per cent of the GSDP. This is within the limits recommended by the 15th Finance Commission and is in accordance with the amended Tamil Nadu Fiscal Responsibility Act 2003, he said.
Coming to the Interim Budget Estimates for 2021-22, given that revenue receipts dropped considerably in 2020-21, a rebound for receipts have expected in 2021-22, he added.
For 2021-22, the interim budget estimated overall revenue deficit of Rs. 41,417.30 crore and fiscal deficit is estimated at Rs. 84,202.39 crore, which is 3.94 per cent of GSDP.
"The elevated level of the fiscal deficit in the current financial year was unavoidable and this deficit has to be brought down gradually to ensure there is no adverse impact on the economy. Even the 15tn Finance Commission has recommended that a higher fiscal deficit of 4 per cent of GSDP should be permitted to States in 2021-22," Panneerselvam said.
State's overall debt outstanding as on March 31, 2021 is estimated to be Rs.4,85,502.54, crore and Rs.5,70,189.29 crore as of March 2022.
Krishnan said, debt situation in the State is not alarming and it is well within the norms prescribed by the 15th Finance Commission.
Panneerselvam also called on the Central Government to merge cesses and surcharges with the basic rate of tax so that States receive their legitimate share of revenue.