Tamil Nadu Chief Minister O. Panneerselvam spared the common man by levying no new taxes in the state budget for 2015-16 while announcing various concessions on the value added tax (VAT). The opposition parties, however, were unimpressed.
Presenting the budget in the assembly, Panneerselvam, who also holds the finance portfolio, said the government has decided against imposing additional taxes despite the severe financial burden and the slow growth in the state’s tax revenues.
He exempted fishing accessories like ropes, floats, twine, fishing lamps, swivels and mosquito nets from VAT while reducing rates on cardamoms, LED lamps, air compressors, cell phones and pump sets.
Electricity tax on power generating plants using biomass would be withdrawn, he said.
Leaders of major political parties trashed the budget, saying there was no useful announcement in it.
According to Panneerselvam, the government has estimated the revenue deficit for 2015-16 at Rs.4,616.02 crore with revenue receipts projected at Rs.142,681.33 crore and the revenue expenditure put at Rs.147,297.35 crore.
The chief minister said the revenue deficit is inevitable owing to increased subsidies, slow tax growth and allocations to social sectors.
With capital expenditure projected at Rs.27,213.17 crore, the fiscal deficit is estimated at Rs.31,829.19 crore.
The major revenue streams for the state are commercial taxes (Rs.72,068.40 crore), state excise (Rs.7,296.66 crore), and motor vehicles tax (Rs.4,882.53 crore).
The tax revenue is expected to log a modest growth of around 12 percent over last fiscal.
Panneerselvam said the share of central taxes is projected at Rs.21,149.89 crore while grants-in-aid from the central government will be Rs.16,376.79 crore.
He said the state’s net borrowings would be raised to Rs.30,446.68 crore against the permissible levels of Rs.32,990 crore.
The total outstanding debt for the state by the end of the fiscal is estimated at Rs.211,483 crore.
In a statement issued here, DMK president M. Karunanidhi said the budget does not answer questions such as the non-availability of pulses in the ration shops, ensuing drinking water scarcity, the time when there will not be any power deficit and when the state would achieve the target of 3,000 MW solar power capacity.
He said the budget does not have anything on the payment of sugarcane arrears to farmers or the procurement price of paddy and sugarcane.
PMK founder S.Ramadoss said there was no announcement in the budget about growing unemployment in the state.
He said agriculture, education and healthcare are the most important focus areas for a state’s development.
A total of Rs.35,794 crore have been allocated for these three departments in this budget while Rs.59,185 crore has been allocated towards subsidies and freebies.