Tamil Nadu’s fiscal deficit, constructed up largely by a swelling income deficit, is “unsustainable” and “alarming”, Finance Minister Palanivel Thiaga Rajan stated Monday as he promised main structural modifications to tug the state out of the monetary sinkhole.
Releasing a white paper that additionally flagged the state’s huge debt, Thiaga Rajan blamed the earlier AIADMK authorities for the shaky funds and stated: “Income technology has come down. A authorities with out income can’t deal with issues.”
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 present fiscal deficit is unsustainable as a result of a portion of it’s funding the income deficit… Since 2017-18, the share of income deficit within the fiscal deficit had a considerable improve of as much as 50% or extra, which implies the borrowings of the federal government just isn’t for the capital expenditure however for the present expenditure,” Rajan stated.
The state Finance Minister stated fast fixes wouldn’t suffice and vowed that the DMK authorities would implement systemic modifications to handle the problem. The income deficit “is at an alarming stage now”, he stated.
In line with 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. That 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 stated 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 stated, the ensures have been rising to adversarial 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.