NewDelhi: DravidaMunnetraKazhagam (DMK)-led Tamil Nadu government on August 9, 2021, released a White Paper on the state’s finances. Following this, state Finance Minister PalanivelThiagaRajan lashed out at the previous All India Anna DravidaMunnetraKazhagam (AIADMK)-led regime in the state for allegedly worsening the budget deficit of Tamil Nadu, thereby making the state over-reliant on debt.
According to the TN interim budget estimate for 2021-22, the overall debt of the state is likely to touch Rs. 5,70,189 crore. While the public debt (excluding the Centre’s debt), as a percentage of GSDP is touching to 26.69%, which is way above the 25% limit permitted by the 14th Finance Commission, the finance minister told media persons.
This effectively translated into a debt of Rs. 2,63,976 for each household in the state, he explained.
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Although the outstanding debt of the government has been pegged at 4,85,503 crore, as of 31 March 2021, if ‘other means of financing the fiscal deficit are taken into account, the real debt boils down toRs. 5,24,574 crore, which equals the five-year total of fiscal deficits, he declared.
The fiscal deficit financed through ‘other means’ between 2016-21 was 12.68% of the total fiscal deficit, which in real numbers translates to Rs. 39,071 crore, he claimed.
In the last three years, particularly, the amounts drawn from public accounts to manage the fiscal deficit have exceeded 10% of the fiscal deficit in proportion, the white paper read.
Notably, Tamil Nadu’s revenue deficit has been deteriorating consistently over the last eight years. This long-standing trend has affected capital investments in the state, which in turn has affected its overall growth. Between 2006-13, the state had clocked a net revenue surplus. However, since 2013, it has witnessed consistent revenue deficit states.
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