A new policy for development of the footwear and leather industry, a Rs 100 crore special fund to build public infrastructure of export organisations, a new micro-cluster development programme, a fillip to the startup ecosystem and the setting up of a coir development board at Coimbatore are among the initiatives in the Tamil Nadu budget for 2022-23.
The state’s revenue deficit is estimated at Rs 52,781.17 crore for FY23, which is less than the revised estimate of Rs 55,272.79 crore in FY22, Tamil Nadu finance minister Palanivel Thiaga Rajan said while presenting the DMK government’s first full-fledged budget on March 18.
“Towards reducing revenue deficit systematically and eventually achieving nil revenue deficits, this medium-term fiscal plan has been devised within an overall framework of adherence to TNFRA (Tamil Nadu Fiscal Responsibility Act) norms to ensure fiscal consolidation and debt sustainability,” the minister said. “Towards this, priority will be for revenue resources and exploring possible measures to improve it. Secondly, improving the expenditure profile by enhanced allocation to growth-oriented expenditure and rationalise revenue expenditure.”
The revenue deficit is expected to narrow to Rs 26,313.15 crore in 2023-24 and to Rs 13,582.94 crore in 2023-24, he said.
The fiscal deficit is estimated at 3.63 per cent of gross state domestic product (GSDP) in FY23. This ratio is expected to be 3.17 percent in 2023-24 and 2.91 percent in 2024-25, within the 3 percent norm prescribed by the 15th Finance Commission.
The state government plans to borrow a net amount of Rs 90,116.52 crore in FY23.
“This excludes an amount of Rs 6,500 crore anticipated from the government of India towards back-to-back loan for GST (goods and services tax) compensation shortfall,” Thiaga Rajan said.
The outstanding debt would be Rs 6,53,348.73 crore as of March 31, 2023, after excluding the back-to-back loan for GST compensation shortfall. This will constitute 26.29 percent of GSDP in FY23.
With the GST compensation regime set to end on June 30, 2022, Tamil Nadu will face a potential revenue shortfall of about Rs 20,000 crore, the minister said.
“State finances have just started to recover after the Covid pandemic and if the compensation is not extended, significant strain will be caused on the finances of the state,” he said, urging the Centre to settle the arrears pertaining to GST in time.
On the cluster development initiative, Thiaga Rajan said these will be set up for cookware in Tirunelveli district, artificial jewellery making by Narrikuruvars in Kancheepuram district, cashew processing in Cuddalore district and toys in Madurai district. These will be among 20 micro-clusters to be taken up this year with an allocation of Rs 50 crore.
For the manufacture of electronic products, two exclusive clusters will be established at Pillaipakkam and Manallur with financial assistance from the Union government.
The proposed special Rs 100 crore public infrastructure fund for export organisations will be used to set up skilling centres, testing centres, export warehouses and inland container depots with contributions from industries and industry associations, he said.
The state government will set up industrial parks in Coimbatore, Perambalur, Madurai, Vellore and Thiruvallur districts to promote industrial development across Tamil Nadu.
“Through these industrial parks, investments worth Rs 50,000 crore will be attracted,” the minister said.
To support startups, state government departments and public sector undertakings will be able to directly procure innovative manufactured products of up to Rs 50 lakh, he said.
Recognising the importance of emerging technologies such as artificial intelligence, machine learning and blockchain, the government has decided to set up an i-Tamil Nadu Technology (iTNT) hub at a cost of Rs 54.61 crore in Chennai, he said.
“This Centre will coordinate efforts to use these technologies to solve complex challenges in the state,” he added.
He also announced the constitution of a human resources reforms committee that will be tasked with proposing a comprehensive roadmap for reforms in human resource management within six months.
(With inputs from agencies)