Tamil Nadu’s fiscal deficit, constructed up largely by a swelling income deficit, is “unsustainable” and “alarming”, Finance Minister Palanivel Thiaga Rajan mentioned Monday as he promised main structural adjustments to pull the state out of the monetary sinkhole.
Releasing a white paper that additionally flagged the state’s large debt, Thiaga Rajan blamed the earlier AIADMK authorities for the shaky funds and mentioned: “Revenue generation has come down. A government without revenue cannot address problems.”
The white paper confirmed that the state had a income deficit of Rs 61,320 crore in 2020-21 — which made up greater than half of the fiscal deficit in that 12 months, Rs 92,305 crore.
“The current fiscal deficit is unsustainable because a portion of it is funding the revenue deficit… Since 2017-18, the share of revenue deficit in the fiscal deficit had a substantial increase of up to 50% or more, which means the borrowings of the government is not for the capital expenditure but for the current expenditure,” Rajan mentioned.
The state Finance Minister mentioned fast fixes wouldn’t suffice and vowed that the DMK authorities would implement systemic adjustments to handle the problem. The income deficit “is at an alarming stage now”, he mentioned.
According to the white paper, the state’s present debt of about Rs. 5.7 lakh crore interprets to a debt burden of round Rs 70,000 on every citizen. This is apart from Rs 1.10 lakh debt per particular person generated from operational losses of the transport company, electrical energy division and curiosity fee.
Thiaga Rajan additionally mentioned the state has the third highest ensures excellent amongst all states after Telangana and Andhra Pradesh and this was largely fuelled by ensures to the facility sector.
In 2020-21, the white paper mentioned, the ensures have been rising to antagonistic ranges within the energy and transport sectors, which stands at Rs 91,818.44 crore together with Rs 82,916.90 crore as a result of energy sector alone.