Chennai: Borrowings by the Tamil Nadu authorities had been properly inside limits prescribed by the Finance Fee, state Finance Secretary S Krishnan mentioned on Tuesday.
Addressing the post-budget press convention, he additionally mentioned Tamil Nadu’s share of taxes on petroleum merchandise has fallen because the introduction of cess by the Centre.
Amid Opposition criticism of the state’s total estimated debt of Rs 5.70 lakh crore with the federal government meaning to borrow Rs 84,686 crore, the official mentioned it was inside the 15th Finance Fee limits, not like some states which have raised extra funds ‘breaching’ the ceiling.
Krishnan mentioned the Centre has allowed states to borrow as much as 5 per cent of their gross state home product (GSDP) as towards the sooner three per cent restrict in view of the COVID-19 pandemic.
“The rise within the borrowings was within the wake of the pandemic. Nonetheless for 2021-22, it has been revised to four per cent (of GSDP)”, he mentioned.
“What one has to see right here is — after the borrowings, the economic system of a State ought to proceed to develop..Solely then it will likely be in a position to pay again the loans in any other case there shall be an issue,” he mentioned.
State Deputy Chief Minister O Panneerselvam, who offered the funds within the meeting earlier within the day, mentioned the federal government meant to borrow Rs 84,686.75 crore.
The excellent debt as a share of GSDP is predicted to be 27.44 per cent in 2022-23 and 27.50 per cent in 2023-24 properly inside the norms outlined by the 15th Finance Fee, he added.
The Finance Secretary mentioned Tamil Nadu has misplaced its share of tax revenues after the Centre modified its coverage to gather cess as an alternative of excise obligation from gas costs.
The state authorities has already made a request to the Centre to merge the cess and surcharge with the essential fee of tax in order that its professional share of income was ensured.
Krishnan mentioned the state authorities modified the Worth Added Tax on gas costs with a watch to profit the folks in Might 2020.
“In the identical month that 12 months, the Centre made some coverage modifications below which excise obligation was modified to cess. As per excise obligation, the Centre has to share the revenues with the States. However after making it as cess, it doesn’t require to take action”, he mentioned.
The transfer by the Centre in Might 2020 additional elevated the taxes collected on gas ‘considerably’, he mentioned.
Krishnan mentioned between April-November 2020 interval the income to the Centre (from gas) grew by 48 per cent whereas the state recorded 39 per cent much less.
Panneerselvam mentioned the share of Central taxes for Tamil Nadu indicated within the Union Finances at Rs 32,849.34 crore within the funds estimates for 2020-21 has been lowered to Rs 23,039.46 crore within the revised estimates.
“Whereas the discount is attributable to the general fall in central tax income as a result of COVID-19, the shrinking of the divisible pool of central taxes as a result of improve within the share of cesses and surcharge can also be a major issue”, Panneerselvam mentioned.
“I reiterate my name to the Authorities of India to merge cesses and surcharges with the essential fee of tax in order that the states obtain their professional share of the income”, he mentioned.
Panneerselvam mentioned the 15th Finance Fee has reset the debt-GSDP norms recognising that elevated borrowings shall be required in 2020-21 and 2021-22 to maintain the degrees of expenditure.
The debt-GSDP ratio of Tamil Nadu as on March 31, 2021 shall be 24.98 per cent and as on March 31, 2022 shall be 26.69 per cent of GSDP, properly inside the norms prescribed by the finance fee, he mentioned.