Rs.1-bn tax concession in Tamil Nadu’s deficit budgetFebruary 17th, 2009 - 7:48 pm ICT by IANS
Chennai, Feb 17 (IANS) Tamil Nadu Finance Minister K. Anbazhagan Tuesday offered Rs.1-billion value-added tax (VAT) concessions while presenting the state budget for 2009-10 with a total deficit of Rs.118.24 billion (Rs.11,823.64 crore).
The government slashed the VAT rates to 4 percent from 12.5 percent for items like ghee, pickles, dried grapes, hand-made iron safe, bleach liquid, stapler pin, safety pins, paper pin, gem clip, rubber band, i-pod and MP3 and MP4 players.
“The total revenue receipts of the government for 2009-10 are estimated at Rs.58,270.93 crore (Rs.582.71 billion) and the total revenue expenditure is estimated at Rs.59,295.28 crore (Rs.592.95 billion). In addition, the total capital expenditure of the government including net of loans and advances is projected at Rs.10,799.30 crore (Rs.107.99 billion),” Anbazhagan told the assembly.
He attributed the revenue deficit, estimated at Rs.10.24 billion, to the decline in government’s revenue due to the slowdown and increase in employees’ salaries following the recommendations of the Sixth Pay Commission.
The minister said the fiscal deficit would be below 3 percent of the gross state domestic product, as stipulated in the Tamil Nadu Fiscal Responsibility Act, 2003.
“Taking into account the net public account, the overall deficit will be Rs.6.36 crore (Rs.63.6 million). This deficit will be made good by economy in expenditure and better tax administration,” Anbazhagan said.
He said the government will constitute a committee to review the concessions given to the film industry - exempting entertainment tax on Tamil films named in Tamil and the reduction in outdoor shooting fees - as the benefits have not been passed on to the public.
A sum of Rs.2 billion has been allocated for providing health insurance for the poor for which tenders from non-life insurers have been called.
The minister also said 3,500 new buses would be bought during the current fiscal with the assistance of the state and the central government under the Jawaharlal Nehru National Urban Renewal Mission.
“A sum of Rs.250 crore (Rs.2.5 billion) has been allocated in this budget as financial assistance by the state government for this purpose,” Anbazhagan said.
He added that approach roads to industrial estates in the state would be developed at an investment of Rs.100 million.
A sum of Rs.30.87 billion has been provided for road development and bridge works, while Rs.8.80 billion has been allocated for road maintenance works.
The budget has proposed a sum of Rs.5 billion for distribution of 2.5 million TV sets free of cost.