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POVERTY REDUCTION STRATEGY TN

immediately. Fiscal

immediately. Fiscal slippage could be due to (i) external circumstances beyond the control of the state government, and (ii) inadequate reform measures. The state government has less control on the revenue side as it depends on external circumstances affecting the economy. If slippage on the revenue side is encountered, it should be counter-balanced by an adequate expenditure side correction. The expenditure side is largely under the control of the government except for interest payments and pensions. 3.8 Summary Fiscal interventions are keys to achieving MDGs based poverty reduction targets. Tamil Nadu has been able to achieve the medium term fiscal responsibility targets. By 2008-09 it has already achieved a fiscal deficit level relative to GSDP which is less than 3 percent and a surplus on its revenue account. The ratio of outstanding liabilities to GSDP is close to 23 percent and interest payment liabilities also compare favourably with many other states. With a view to achieving MGDs based poverty reduction targets, expenditure on infrastructure as well as that on health and education needs to be further strengthened. We have drawn up a fiscal restructuring plan for the period up to 2014-15 to show that, it is consistent with the FRBMA to create additional fiscal space for augmenting capital expenditure as well as expenditure on health and education. The following are the main features of the proposed fiscal restructuring process. 1. The FRBM targets of maintaining surplus on revenue account and keeping fiscal deficit at or below 3 percent of GSDP has to be adhered to throughout the period up to 2014-15. However, it is not necessary to over-achieve the fiscal deficit target excessively by bringing fiscal deficit down much below 3 percent. 2. Keeping fiscal deficit at 3 percent of GSDP, with some revenue account surplus, capital expenditure can be increased reasonably above 3 percent of GSDP. It is shown in the fiscal restructuring scenario that the capital expenditure to GSDP ratio can be increased to a level close to 4.6 percent of GSDP by 2014-15. This will not cause any appreciable increase in the debt-GSDP, which remains below 23 percent. 3. On the revenue expenditure side even though there may be some pressure on pensions and salaries, interest payment relative to GSDP will steadily go down as growth of liabilities is kept in check. 4. In combination with marginally buoyant revenues, expenditure on education and health can be increased from 2.56 and 0.66 percent of GSDP in 2007-08 to nearly 5 percent in the case of education and a little less than 1.3 percent in the case of health. This will however necessitate some reduction in other social services as well as economic services. However, for a sustained broad based reduction of poverty, 68

Government of Tamil Nadu has to substantially increase expenditure on education and health thereby bringing in about quantitative and qualitative strengthening of these services. 5. Other components of fiscal structuring would include reforms in subsidies, continuous monitoring of non-tax revenues which has to be linked to increases in cost of providing services and preparation for implementation of GST. In the next Chapter we look at the spatial imbalances that exist within the state. The inter-district level inequalities in terms of human development index, gender related deficiencies, poverty profile and implementation of employment generation programmes are examined. 69

World Comparative Economic And Social Data
Police Stations - 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