Tamil Nadu finance minister K Anbazhagan on Friday presented the state Budget, which earmarked an all-time high outlay of Rs 17,858 crore for social safety net and Rs 12,285 crore for capital expenditure for the year 2010-11.

“The Budget has been prepared keeping in mind the basic goals of social justice, growth of Tamil Nadu and improvement in the standard of living of the people,” said Anbazhagan.

Total plan outlay is up 14 per cent to Rs 20,000 crore for the year 2010-11 from Rs 17,500 crore in 2009-10.

The government has estimated revenues at Rs 63,091.74 crore for 2010-11 and expenditure at around Rs 66,488.19 crore — a revenue deficit of Rs 3,396.45 crore. “Implementation of recommendations of the Sixth Pay Commission is the main reason for this deficit,” said the minister. For the current financial year, revenue deficit is estimated at Rs 5,019.54 crore.

It has projected the fiscal deficit to be 3.7 per cent of the gross state domestic product at Rs 16,222.13 crore higher than Rs 12,860.45 crore in 2009-10. “The fiscal deficit for the year 2010-11 is permissible as per the recommendations of the 13th Finance Commission,” he said.

In view of the Assembly elections scheduled for 2011, the state government has announced various schemes to keep its voters happy.

For farmers

For instance, it has set a target to disburse Rs 2,500 crore to farmers during 2010-11 as against Rs 2,000 crore in 2009-10. It has also allocated Rs 140 crore towards interest-free cooperative crop loans to the farmers and Rs 200 crore towards crop insurance. A sum of Rs 200 crore has been set aside to procure paddy at Rs 1,050 a quintal as compared with Rs 1,000.

To provide free electricity for farmers, the state government has allocated Rs 295 crore as subsidy for the Tamil Nadu Electricity Board. A sum of Rs 351 crore has been allocated for animal husbandry and dairy development department. In view of declining prices of pulses and sugar, Rs 3,750 core has been allocated as food subsidy.

Health and family welfare

The other major focus in the Budget was on health and family welfare, for which the government has allocated Rs 3,889 crore. This includes Rs 750 crore for payment of insurance premium for Kalaignar Health Insurance, Rs 79 crore for free emergency ‘108’ ambulance service, Rs 80 crore for maintenance of government hospitals and Rs 236 crore for purchasing medicine. New buildings, equipment and hostels have been sanctioned for existing medical college hospitals at a cost of Rs 543 crore.

The government has also given its nod to set up government medical colleges in five district headquarters —Dharmapuri, Viluppuram, Tiruvarur, Sivanganga and Perambalur. A new medical college will be established at Tiruvannamalai in the coming financial year.

Taluk and district level government hospitals too are being improved at an estimated cost of Rs 506 crore with the assistance of the World Bank. An additional assistance of Rs 627 crore is expected from the World Bank for this project soon.

To add 1,400 Mw

The state will add 1,400 mega watt of additional power, which is expected to come from new projects being set up by the TN Electricity Board, central public sector undertakings and joint ventures.

Anbazhagan said work on the 1,200 Mw North Chennai thermal power station and 600 Mw expansion project at Mettur was progressing fast. The first unit of Koodankulam Atomic Power plant is expected to be commissioned in the coming financial year while plans are being worked out to increase electricity generation by another 8,000 Mw.

Road projects

The government will take up road development projects worth Rs 4,965 crore across the state. The minister said Rs 1,967 crore had been sanctioned to construct 92 railway-over-bridges and works had been taken up. Works on 725 km roads from Arcot to Tiruvarur and from Nagapattinam to Thoothukudi have also been taken up at a cost of Rs 1,333 crore with the assistance of the World Bank.

Work on the six-lane Outer Ring Road at a cost of Rs 1,081 crore would commence soon. It is expected to be completed by September 2012. Development of Singaperumalkoil – Oragadam Sriperumbudur road is being taken up at a cost of Rs 300 crore. A sum of Rs 165 crore has been allocated towards this.

The government has also decided to build Western Outer Ring Road for Coimbatore, a four-lane road stretching 26 km at a cost of Rs 284 crore, through the public sector. Also, during the year, it would purchase 3,000 new buses for around Rs 250 crore.

Slashes VAT

Value-added tax (VAT) on unbranded products, including coffee, bakery products, steel furniture, footwear, dry grapes and branded items — masala powders, bajji flour, ghee, vanaspati, pickles and wet grinders -- has been slashed from 12.5 per cent to four per cent. In a bid to curb the hike in sugar price in the open market, imported sugar would be exempt from purchase tax for one year.

Highest allocation for education

A sum of Rs 10,148 crore has been allocated for school education, the highest in the history of the Tamil Nadu Budget. The government also earmarked Rs 1,751 crore for the higher education department.

IT exports up 29 per cent

The value of software exports from the state increased 29 per cent in 2008-09 to Rs 36,680 crore from Rs 28,426 crore, a year ago.

Finance minister K Anbazhagan in his Budget speech said IT parks were being established in municipal corporations like Coimbatore, Madurai and Trichy. The ‘Tidel’ IT Park at Coimbatore, being set up at an estimated cost of Rs 380 crore, will be completed by May 2010.

The Tamil Nadu State Wide Area Network, which connects headquarters of various government departments with offices at district, divisional and block levels through Internet, will be expanded at a cost of Rs 22 crore.

Source : Business Standard, India, dated 20/03/2010