With no new tax proposals and not even changes in the existing tax structure or rates, the Tamil Nadu Government under ADMK rule has attempted a populist budget in a balanced manner looking to the compulsions and freebies promised to the voters on the eve of general elections and the manuerablilty of receipts from various sources. This is the ADMK Government’s third budget for the Fiscal 2013-14.
A special feature of this type in the budget has been resorted to by the Chief Minister J.Jayalalitha and Finance Minister O.Panneerselvam for a certain purpose possibly based on the inputs received from the Chief Secretary Sheela Balakrishnan and Finance Secretary K.Shanmugham. They deserve special mention and appreciation for such a novel departure at this juncture when all the states generally face a financial crunch everywhere. Even minor changes have been avoided as far as tax receipts are concerned.
For 2013-2014, the Government has pegged the overall target for the State’s own taxes at Rs. 86,065.4 crore, with a projected growth rate of 17% over the Revised Estimates for 2012-2013. The estimates for Commercial Taxes, Excise Duty and Motor Vehicles taxes are Rs.56,025.24 crores, Rs.14,469.87 crores and Rs.4,881.15 crores, respectively. They hope that in 2013-2014, the registration of documents will pick up and the revenue from the collection of Stamp duty and registration fees will be Rs.9,874.22 crores.
Within the last two years, this Government claims that it has brought the State finances back on track. From a revenue deficit of Rs.2,728.69 crores in 2010-2011, this Government has presented two successful budgets with a revenue surplus. The Budget Estimates 2012-2013 had projected a revenue surplus of Rs.2,376 crores. However, owing to increased expenditure commitments, especially because of the efforts of this Government to revive the financial health of TANGEDCO and the substantial reduction in receipts from the Government of India, the revised estimate of revenue surplus is reduced to Rs.451.52 crores. However, the fiscal deficit has been restricted to Rs.19,889.31 crores, which is only 2.88% of GSDP. Both these indicators are well within the targets specified in the Tamil Nadu Fiscal Responsibility Act, 2003, and the requirements of the 13th Finance Commission. During 2013-2014, they are projecting a revenue surplus of Rs.664.06 crores and a fiscal deficit of Rs.22, 938.57 crores. This fiscal deficit will be 2.84% of GSDP, which is within the stipulated norm of 3%.
As expected by any student of economics like me a performance budget containing the targets and achievements registered during the previous years by the same state government would have carried more conviction and exhibited its actual competency. Unfortunately no state government dares to submit for obvious reasons.
The GSDP growth rate, according to the Advance Estimates for 2012-2013, is only 4.61% at constant prices. The severe drought and crop failure has hit the state badly in the primary sector, which has ultimately affected the service sector growth as well. The general economic slowdown in the national economy and shortage of power has hampered growth in the manufacturing sector as claimed by the finance minister. The state government has to take sincere steps seriously and work hard to compete with some north Indian states like Gujarat in terms of economic growth in the next two-three years.
The approach adopted by the finance minister in regard to certain sectors as revealed from the following list is obvious and praise-worthy too:
i. Continued thrust on primary sector and infusion of more investment in storage and marketing infrastructure.
ii. Speedy implementation of infrastructure projects and investing more funds in new projects for power, roads connectivity, etc.
iii. Additional incentives to encourage balanced industrial growth in backward and most backward areas, particularly in Southern Tamil Nadu.
iv. Special package for Micro, Small and Medium Enterprises (MSME) to boost employment generation and to revitalise industrial growth.
The overall allocation for the primary sector has been increased to Rs.17,220.89 crores in the Budget Estimates 2013-2014. The allocation for agriculture has been increased to Rs.5,189.15 crores during 2013-2014, over the current year's allocation of Rs.4,829.93 crores, which is the highest ever allocation for the sector.
During the past two years, this Government has laid a strong foundation for ushering the State into a second green revolution by enhancing agricultural productivity. This Government will continue to adopt strategies for increasing farmers income through the dissemination of better cultivation practices and front end technology; enhancement of farm productivity through mixed farming and integrated farming; adoption of water conservation measures like use of micro irrigation system; spread of farm mechanisation to small and marginal holdings; and integration of agricultural markets and promoting post-harvest management and processing – all done with good intention and we wish for proper implementation in future too.
The Annual Credit Plan target for the disbursement of crop loans has been set at Rs.39,135 crores for the financial year 2013-2014. The crop loan target under the Co-operative Sector will be stepped up from the present level of Rs.4,000 crores to Rs.4,500 crores in the coming financial year. The allocation for the National Horticulture Mission (NHM) will be Rs.140 crores in 2013-2014 and Rs.21 crores has been provided as the State's share in the Budget . Estimates 2013-2014. In the coming financial year, a special focus will be given to increasing the area under vegetable cultivation to 8.2 lakh acres from the existing 7.25 lakh acres. Rs.20 crores has been allocated for promoting agro processing industries under the National Mission for Food Processing This is an area where the state lags behind other leading players in the country and any amount of focus and allocation would be justified due to small holdings in huge percentage.
The size of the total State Plan allocation during the Twelfth Plan period is pegged at Rs.2.11 lakh crores. The objective of the entire planning process as announced by the ADMK government will be the eradication of poverty, creation of more and better job opportunities and overall improvement in the quality of life. The State will exceed the Annual Plan target of Rs.28,000 crores during 2012-2013 and the allocation has been increased to Rs.37,000 crores for 2013-2014. The plan allocation for the primary sector has been increased by 20.12%. – a good step in right direction. An allocation of Rs.2,000 crores for the Infrastructure Development Fund and Rs.200 crores for the Project Preparation Fund have been provided in the Budget Estimates 2013-2014.
Rs.50 crores has been earmarked in the Budget Estimates of 2013-2014 for the construction of buildings for the remaining 109 Police Stations. This will ensure that all the Police Stations in Tamil Nadu will hereafter function only from their own buildings. This measure on the part of ADMK government is really appreciable because the state police would not need any private building hereafter. The overall allocation for the Police Department has been increased from Rs.4,096.7 crores in 2012-2013 to Rs. 4,706.17 crores in the Budget Estimates 2013-2014. The state police would have to exhibit its gratitude towards the state administration by pruning and training its forces for maintaining law and order in the state in the best possible manner. Prompt registration of FIRs in police stations and timely disposal of petitions by higher authorities in the department would have to be ensured by them.
So far, 1,61,142 vacancies across various departments have been filled up. In co-operative societies and banks alone, 9,914 employees have been newly appointed. Similarly, in Public Sector Undertakings, 22,452 personnel have been newly appointed. All told, this Government has appointed 1,93,508 employees since May 2011, greatly relieving the stress on governance. This is a welcome and admirable achievement of the government although this is quite in contrast with the attitude of the ADMK’s previous rule around 2004-05.
The fast track patta transfer system introduced by this Government has helped to dispose of over 26 lakh cases so far. The figure is mind-boggling and deserves a check-up. The overall pendency level has been brought down from 1,46,067 cases at the beginning of the scheme, to less than 33,000 cases now.
The state is providing free rice to all rice card holders from June 2011 onwards. This Government is also supplying tur dhal, urad dhal and palm oil at subsidised prices under the special Public Distribution System so as to insulate the poor from the increasing prices of essential commodities. A sum of Rs.4,900 crores has been provided in the Budget Estimates 2013-2014 for food subsidy.
The Government is taking several steps to improve power supply in order to provide uninterrupted quality power to the consumers. NTPC-TANGEDCO Joint Venture Project Unit-I at Vallur has already been commissioned and the generation has been stabilised. The MTPS Stage-III (600 MW), NTPC-TANGEDCO Joint Venture Unit-II at Vallur and North Chennai Thermal Power Station Stage II, Unit-II have commenced trial production. North Chennai Thermal Power Station Stage-II, Unit-I (600 MW) will be commissioned in May 2013. The third unit (500 MW) of NTPC-TANGEDCO Joint Venture at Vallur will be commissioned in October, 2013. Two units of 500 MW each of NLC-TANGEDCO joint venture at Tuticorin are expected to be commissioned in December, 2013 and March, 2014 respectively. All these new projects are expected to give an additional generation of 3230 Mega Watt.
Other measure that deserves praise is that this Government will create a land bank of 25000 acres through SIPCOT to attract more industries to the State. A new ship building yard will be established in Thoothukudi by the Tamil Nadu Industrial Development Corporation (TIDCO) under Public-Private Partnership.
Timely sanction of schemes and projects with enough lead time for implementation would only justify such an annual exercise in real terms.
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