Fiscal deficit stands at ₹19,228 cr. in first quarter

It is 32.4% of ₹59,346 crore projected in budget estimates

Tamil Nadu’s fiscal deficit (the difference between total revenue and expenditure excluding borrowings) stood at ₹19,228.14 crore in the first quarter of 2020-21 (April-June), according to the provisional figures from the Comptroller and Auditor-General (CAG).

The first quarter fiscal deficit is about 32.4% of the ₹59,346 crore projected in the budget estimates for 2020-21. The State’s total receipts, excluding borrowings, in the first quarter stood at ₹29,322.25 crore, which is about 13.04% of the estimated ₹2,24,739 crore.

Total revenue receipts was ₹29,214.51 crore, down about 23.2% from ₹38,053.01 crore in the same period last year.

The State’s Own Tax Revenue, which comprises the State GST, Stamp Duty and Registration Fees, liquor revenues and the VAT on sale of petrol and diesel, was ₹11,755.24 crore, down nearly 49% from ₹23,000.22 crore in the same period last year.

Interestingly, one component of the revenue receipt which has seen a jump is grants-in-aid from the Union government. The grants-in-aid increased to ₹10,918.67 crore in the first quarter of 2020-21 from ₹4,186.58 crore in the same period last year. The State’s share of union taxes declined to ₹4,446.35 crore from ₹5,979.39 crore in the same period last year.

The revenue expenditure increased 2.41% to ₹46,486.76 crore from ₹45,391.21 crore in the same period last year. However, expenditure on account of salaries and wages and subsidy are still being compiled for the first quarter of this year, the CAG said.

The revenue deficit for the first quarter stood at ₹17,272.75 crore.

In the last week of June, Chief Minister Edappadi K. Palaniswami had said the State’s fiscal deficit could touch ₹85,000 crore this year, if the fall in revenues continued. The Finance Department’s estimate had put the revenue shortfall at ₹35,000 crore, compared with the budget estimates, he had said.

“I peg the fiscal deficit at ₹1lakh crore in 2020-21, and these figures point to that trend. The early release of grants-of-aid by the Centre has helped contain the fiscal deficit to some extent. But it will be difficult for tax revenue to get back to the previous year levels,” DMK IT wing head and MLA Palanivel Thiagarajan said.

He said the State had to cut expenditure to manage the situation, mainly the capital expenditure that went into infrastructure projects.The capital expenditure in the first quarter of 2020-21 declined nearly 37% to ₹1,874.64 crore from ₹2,964.55 crore in the same period last year.

Tamil Nadu has been the biggest borrower from the market so far during 2020-21. The borrowings have jumped 117% to ₹46,000 crore from ₹21,190 crore in the same period last year.

This week, Deputy Chief Minister and Finance Minister O. Panneerselvam will present supplementary budget estimates, which will shed more light on the State’s finances.