Views
9 months ago

POVERTY REDUCTION STRATEGY TN

a. Evolution of Fiscal

a. Evolution of Fiscal Imbalance Focusing first on fiscal imbalance, we observe that revenue deficit relative to GSDP had deteriorated from a low of 0.4 percent in 1995-96 to a peak of 3.3 percent in 1999-00. Thereafter there has been an improvement. Since 2005-06, the revenue account in Tamil Nadu has been in surplus. In 2008-09 RE, the revenue surplus is zero, meeting the Fiscal Responsibility and Budget Management Act (FRBMA) targets (Chart 3.2) but thereafter turned deficit. In the nineties, fiscal deficit had peaked in 1999-00 at 4.0 percent of GSDP. After that it improved in the next two years. It rose to 4.3 percent of GSDP in 2002-03. But this rise reflects a one-time adjustment on account of State Electricity Board. Fiscal deficit in Tamil Nadu in 2009-10 BE is less than 3 percent, signaling achievement of the FRBMA target. Chart 3.2: Revenue and Fiscal Deficit as Percent of GSDP: Tamil Nadu 5.00 4.00 3.00 2.00 1.00 0.00 -1.00 -2.00 19 93- 94 3.80 4.01 4.26 3.28 3.46 3.18 3.06 3.18 2.58 2.74 2.77 2.65 2.99 2.22 2.34 2.05 1.93 1.84 1.51 1.51 1.13 1.16 1.24 1.01 1.22 0.89 0.57 0.37 0.35 0.00 0.26 19 94- 95 19 95- 96 19 96- 97 19 97- 98 19 98- 99 19 99- 00 20 00- 01 20 01- 02 20 02- 03 20 03- 04 20 04- 05 20 05- 06 20 20 20 -0.87 06- -1.01 07- 08- 07 08 -1.50 09 RE 20 09- 10 BE Fiscal Deficit Revenue Deficit Historically, Tamil Nadu has been one of the better performers in maintaining fiscal discipline. Table 3.2 places Tamil Nadu relative to other general category (southern) states in terms of four important indicators of fiscal performance. 54

Table 3.2: Tamil Nadu in Inter-state Comparison: Selected States: 2007-08 (RE) (Percent) States Interest Payment to Revenue Expenditure Interest Payment to Revenue Receipts Own Tax Revenue/ Revenue Expenditure Revenue Deficit/ Fiscal Deficit Capital Outlay/ Fiscal Deficit Andhra Pradesh 15.5 15.4 56.4 -4.9 139.8 Karnataka 12.5 11.6 71.9 -49.0 146.0 Kerala 18.2 22.1 53.5 67.3 21.7 Tamil Nadu 13.5 13.2 64.1 -12.4 105.4 All States 17.0 16.4 48.4 -20.9 118.9 Source (Basic Data): RBI (2008), State Finances: A Study of Budgets 2008-09, December. b. Outstanding Liabilities and its Determinants The accumulation of primary deficit, that remains unneutralized by the excess of growth over interest rate results in an increase in outstanding liabilities of the government. In Tamil Nadu, the outstanding liabilities have increased from a level of 18.7 percent in 1993-94 to 29.3 percent in 2003-04, a rise of more than 10 percentage points in 10 years (Table 3.1 and Chart 3.3). After this year, it has started stabilizing. It actually fell for a few years, but is slated to be at 22 percent in 2009-10 BE. This may be an acceptable level considering that the Twelfth Finance Commission (TFC) has suggested an overall target of 28 percent for the states as a whole. The TFC has recommended debt relief to the states in the form of restructuring of all central loans with state governments as on March 31, 2005 by consolidating and rescheduling at 7.5 percent interest rate repayable over twenty years. This was made conditional on a state enacting a Fiscal Responsibility Legislation, which Tamil Nadu government had already enacted in 2003. With some amendment, Tamil Nadu became eligible for the benefit of rescheduling and debt write-off. As a result, Rs. 6872 crore of outstanding central loans on Tamil Nadu government’s books were to be restructured. The interest gain is estimated at Rs. 1195 crore in Tamil Nadu’s case over the period 2005-10. The TFC had also recommended debt write-off linked to reduction in the revenue deficit of the state government. Under the scheme, a certain proportion of repayment of rescheduled debt is to be written off by Government of India over the period 2005-06 to 2009-10. The quantum of write-off is linked to the absolute amount of reduction in the revenue deficit each year with the ultimate objective of eliminating the revenue deficit by 2008-09. 55

World Comparative Economic And Social Data
Police Stations - Tamil Nadu Police
Nammakal - Tamil Nadu Police
N u m b e r o f S c h o o l s - DISE
Census 2011 population of Latur district
PDF: 1.0MB - Population Reference Bureau