Into 3rd year, with guns blazing: Fiscal deficit down to 3%; TN GSDP growth projected at 14%

After squirreling away the state’s and earnings for two years,Tamil Nadufinance ministerPalanivel Thiaga Rajanon Monday presented a budget that reflected fiscal discipline, measured populism and a promise to balance the two.
By reducing Revenue Deficit by around 16,062 crore,PTRmanaged to restrict Fiscal Deficit – as a Percentage of GSDP – at 3% this year (2022-23) at 30,476 crore (46,538 crore in 2021-22, at 3.4%).

Yet he managed to set aside 7,000 crore to offer 1,000 a month for Women household-heads from September this year to fulfil a prominent poll promise of theDMKin 2021. Termed the “largest direct cash payout” by any state, the announcement comes at a time when the state faces an annual loss of 20,000 crore as GST compensation from the Centre from 2023-24. The finance minister announced higher allocations for Education, urban development, highways and Health for the year ahead.

The state’s own tax revenue is estimated to grow by almost 20% at 1.81 lakh crore during 2023-24, as against 1.52 lakh crore in the revised estimates of 2022-23. The state’s own non-tax revenue is expected to register a 32% Growth at 20,223.51 crore during 2023-24 compared to 15,309.4 in the revised estimates for 2022-23.
The share of central taxes is set to

increase to 41,664 crore in 2023-24 (38,731 crore in the 2022-23 revised estimates). Despite an increase, it continues to be far less than what should be devolved to states but for the indiscriminate levy of cesses and surcharges by the Union Government, PTR pointed out. Grants-in-aid from the Union government will be lower at 27,444 crore, including 4,572 crore in GST compensation arrears for 2023-24 compared to 39,748 crore, including 16,215 crore as GST compensation arrears in the revised estimates of 2022-23.