Chennai: Finance minister O. Panneerselvam on Friday dismissed the charge of opposition DMK that the state was facing a projected revenue deficit of Rs 15,000 crore for 2016-17 due to poor fiscal management by government.
Replying to the debate on the revised budget for 2016-17, he said due to economic slowdown since 2013-14, tax revenue from automobile, cement, iron and steel and Indian Made Foreign Liquor had not gone up adequately.
“Besides, the fall in petroleum prices have resulted in a reduction in commercial tax collection. However, the Chief Minister did not raise the tax on petrol (27 per cent) and diesel (21.43 per cent),” he said.
The minister said if the state had raised the tax on petroleum products like Andhra Pradesh and Telangana, it would have got Rs 14,419 crore as revenue from the tax in 2015-16, instead of Rs 10,113 crore. “The state would have got an additional revenue of Rs 6,000 crore in 2015-16,” he said.
Considering the loss of Rs 6,000 crore from the Central pool due to 14th Finance Commission recommendation and additional expenditure of Rs 2,600 crore due to Centre’s cutting grant-in-aid for schemes, he said if the state had not lost those share, there would not be Rs 15,000 crore deficit.
Allaying apprehensions raised by opposition DMK over the state’s fiscal deficit, he said the fiscal deficit projection for 2017-18 at 3.34 per cent was based on the present scenario which may change.
Referring to a DMK member Palanivel Thiagarajan’s view that the State would violate the 3 per cent threshold for fiscal deficit next year, he said fiscal deficit would also increase when revenue deficit goes up.
“However, it has been reined in within three per cent (in tune with Fiscal Responsibility and Budget Management Act).” The medium-term fiscal projection for 2017-18 has pegged fiscal deficit at 3.34 per cent.
Citing the 3.34 per cent projection, the minister said, “The projection is based on the present scenario and computed in keeping with FRBM Act. It cannot be said that the same scenario will prevail during next year. It may change and accordingly, projections would change or decisions will be taken based on that situation.”
