The new DMK government on Friday did not announce any fresh tax in its first budget – a paperless budget – but cut tax on petrol by Rs 3 as promised in its election manifesto. State finance minister Palanivel Thiaga Rajan presented the revised budget for 2021-2022 stating that it would lay a strong foundation for the full budget for next year.
“Arresting and reversing fiscal mismanagement is one of the important commitments we made to the people. The task is daunting and cannot be completed at one go or in one year. It will need sustained efforts over at least two to three years,” the minister said.
Revised budget estimates
However, the pandemic has forced the government to delay the fiscal consolidation. “Given that the economy is still just recovering from the impact of successive waves of the Covid-19 pandemic, the time is not yet ripe for fiscal consolidation. Hence, revenue deficit for the year 2021-22 is expected to go up from the unrealistic Interim Budget Estimates of Rs 41,417.30 crore to Rs 58,692.68 crore in the Revised Budget Estimates 2021-22,” the minister added.
Tax on petrol reduced
Tamil Nadu government has announced that tax on petrol will be reduced by Rs 3 per litre. This will cost the State government Rs 1,160 crore annually. The reduction was done as per the instructions of the Tamil Nadu Chief Minister MK Stalin, he said. The DMK, in its manifesto, had promised to reduce Petrol price by Rs 5 per litre and diesel by Rs 3 per litre.
On the energy sector, the minister said almost 2,500 MW of power has had to be bought on the power exchanges to meet peak needs. Thus, the statement that Tamil Nadu had turned a power surplus State over the last few years is inaccurate.
A total of 17,980 MW of power generation capacity will be added through own generating stations in the next 10 years.
He also announced that Tamil Nadu will set up industrial parks in Theni, Tirunelveli and Ranipet districts. SIPCOT Industrial Estates will come up in nine districts, including Tiruvannamalai and Dharmapuri, and a sum of Rs 1,500 crore has been allocated for the same as the first instalment, he said.
Tidel Parks to come up Villupuram, Vellore and Tirupur. Nandambakkam in Chennai will get a FinTech city. Defence Industrial Park to come up in Coimbatore in about 500 acres, he said in his Budget speech.
Singara Chennai 2.0
The government has announced that Singara Chennai 2.0 will be launched. The city will be made poster-free and will get three flyovers. It will also establish an advisory council to develop a Federal Fiscal Model with renowned experts on legislation involving revenue and taxation (including GST).