Edu, agri get big share in budget ahead of 2021 polls

Govt to launch new industrial policy to earn GST incentive benefits

CHENNAI: AIADMK convenor and deputy Chief Minister O Panneerselvam on Friday presented the last full-fledged budget ahead of the Assembly elections next year. As anticipated, OPS, who also handles the Finance portfolio, tabled a populist budget with the lion’s share allotted for school education, agriculture, infrastructure and social security schemes.

In his 10th budget presentation, which lasted for more than three hours, the deputy CM admitted that the State’s financial situation was strained and attributed fiscal deficit to economic slowdown and poor GST contribution from the Centre. “The State’s net outstanding debt at the end of March 31, 2021, was expected to rise significantly to over Rs 4.50 lakh crore in 2020-21, as against the projected Rs 3.97 lakh crore in 2019-20,” Panneerselvam noted. The State allocated Rs 11,894.48 crore for agriculture, besides disbursement of crop loans to the tune of Rs 11,000 crore through cooperative institutions. OPS also pointed out that the government will shortly launch a new industrial policy which will provide GST regime compatible incentives. The government will take up the issue of adequate budgetary provision with the Centre and ensure that the State receives its entire recommended grant in 2020-21, OPS said.

In order to finance fiscal deficit during 2020-21, the deputy CM said the State estimated Rs 59,209.30 crore will be raised as net debt. “Therefore, the net outstanding debt at the end of March 31, 2021, is expected at Rs 4,56,660.99 crore. The State’s own tax revenue is estimated to increase to Rs 1,33,530.30 crore for the year compared to the revised estimate of Rs 1,20, 809.63 crore.” The deputy CM also noted that the Centre was delaying the release of State’s dues under various heads ranging from performance grants given to local bodies and to the aided programmes.

“The inter-se horizontal share of Tamil Nadu has increased marginally from 4.023 per cent to 4.189 per cent which is a welcome reversal in the trend of Tamil Nadu’s share consistently going down in the last few finance commissions reports. But it still does not make up for the injustices heaped on Tamil Nadu in the past, especially by the 14th Finance Commission. The State will again strongly pitch before the 15th Finance Commission that a performing State like Tamil Nadu gets adequately rewarded and incentivised through a progressive formula and mechanism for sharing of resources,” emphasised OPS.

CHENNAI: Deputy Chief Minister O Panneerselvam on Friday made it clear that the state would support GST, only if there was an iron-clad guarantee of compensation enshrined in the Constitution itself.

“It is the obligation of the Government of India to find resources to pay the compensation and there should be no effort to limit the compensation payable to the states. Chief Minister Edappadi K Palaniswami and late CM Amma (Jayalalithaa) have already raised the issue with the Prime Minister in this regard,” Panneerselvam said. “I urge the Government of India to discuss the matter in the GST Council to arrive at an appropriate solution,” he added in his budget speech.

The 15th Finance Commission has accepted Tamil Nadu’s assessment that the state will have a post devolution revenue deficit and recommended a revenue deficit grant of Rs 4,025 crore for Tamil Nadu. This is finally a recognition of the committed welfare-oriented expenditure of the state which fulfils the people’s legitimate aspirations. However, while in the Action Taken Memorandum, the Central Government has indicated that the recommendations of the 15th Finance Commission on post devolution revenue deficit grants is accepted, as against the total grant of Rs 74,340 crore recommended by the Commission, the Union Budget includes a provision of only Rs 30,000 crore. The state government will take up the issue of adequate budgetary provision with the Central government and ensure that the state receives its entire recommended grant in 2020-21, he said.