JOIN USPetrol to get cheaper in Tamil Nadu as Finance Minister slashes excise duty
Fulfilling one of the major election promises, though partially, by reducing Rs 3 in excise duty on petrol, Finance Minister P T R Palanivel Thiaga Rajan on Friday postponed “deeper reforms” to ensure the state’s “debt overhang” is corrected till overcoming the Covid-19 pandemic.
Presenting the revised Budget for 2021-2022 financial year, amid a boycott by principal Opposition AIADMK, Thiaga Rajan said the primary ambition of Friday’s exercise is to lay the “strongest foundation” for the full budget for the financial year 2022-23 which will be presented in February 2022.
Rajan had on August 9, while releasing a white paper on state’s finances, batted for “once-in-a-generation” reforms to end the vicious cycle of debts that Tamil Nadu finds itself in – the overall debt stands close to Rs 6 lakh crore.
The three-hour long budget speech by Thiaga Rajan, a former investment banker, gave strong hints that the “full budget” next year will have much-talked about reforms that might include an increase in property tax among other things to generate revenue for the state which has been falling for the past few years.
In Friday’s speech, he announced a slew of measures to collect data to ensure proper and targeted delivery of services to various sections of the society. In what seems the first towards providing targeted cash subsidies than universal, Thiaga Rajan said the government was in the process of identifying households eligible for receiving Rs 1,000 to women heads, another poll promise of the DMK.
However, Thiaga Rajan gave a categorical assurance that all promises made by the DMK during the 2021 assembly elections will be fulfilled gradually, while announcing a cut in excise duty on petrol by Rs 3. With this, the price of petrol in Tamil Nadu may go back to a double-digit figure from Saturday.
“This Government has decided to reduce the effective rate of tax on petrol by Rs.3 per litre and thereby provide major relief to the toiling working class people in the State. This measure will result in a loss of revenue of Rs.1,160 crore a year,” Thiaga Rajan said. DMK had in its manifesto promised to reduce the prices of petrol and diesel by Rs 5 and Rs 4.
The Budget laid focus on revamping the School Education, and Higher Education departments besides speaking of ambitious projects to protect the environment. The budget announced the appointment of a high-level committee of educationists and experts to formulate a distinct State Education Policy for Tamil Nadu, while allotting Rs 20 crores for setting up smart classes.
While 10 new arts and science colleges will be set up by the government, the famous Arulmigu Baladhandayuthapani Swamy Temple, Palani will establish a Siddha medical college. A separate Siddha University will also be established.
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The finance minister also announced setting of SIPCOT industrial parks in half-a-dozen backward districts to decentralise industrialisation in the state, while announcing four Tidel (IT) parks in Villupuram, Vellore, Thoothukudi, and Tiruppur districts.
Noting that time is not yet ripe for “fiscal consolidation” given that the economy is still just recovering from the impact of successive waves of the Covid-19 pandemic, Thiaga Rajan said revenue deficit for the fiscal is expected to go up from the “unrealistic Interim Budget Estimates” of Rs.41,417.30 crore to Rs.58,692.68 crore in the Revised Budget Estimates.
“The increase in revenue deficit is on account of the exceptional times that we find ourselves in and does not detract in the least from this Government’s commitment to fiscal rectitude and consolidation in the coming years, as emphatically indicated in the white paper,” he said.
Contending that the most significant finding in the white paper is the deterioration of the tax GSDP ratio of Tamil Nadu by 3.02 per cent from 8.48 per cent in 2006-07 to just 5.46 per cent in 2020-21, Thiaga Rajan said this represents loss of about Rs.65,000 crore worth of revenue per annum.
“Through improved administration and plugging of leakages, revenue collections can be substantially stepped up,” he said. Targeted actions would be taken against tax evasion based on advanced data analytics,” he said, adding that the total number of roving squads will be increased to 100 and equipped with vehicles and RFID reading devices to prevent movement of vehicles without bills.
The budget said the first corridor under the Phase-II project of Chennai Metro will be operational by June 2025. The finance minister said efforts are on to study the feasibility of bringing metro to Madurai.
On Covid-19, the budget said against a capacity to vaccinate 8 lakh persons a day, the state receives on an average 2.4 lakh vaccines. He also announced that the famous Arulmigu Baladhandayuthapani Swamy Temple, Palani will establish a Siddha medical college.