Tax sops in Rs 6.36-cr deficit TN budget

Waiver of interest on co-operative crop loans for the first year, tax reduction on several items of daily use and increased public spending on infrastructure and social safety are the highlights of the Tamil Nadu budget for 2009-10 presented in the the State Assembly by finance minister K Anbazhagan on Tuesday. The estimated overall deficit is Rs 6.36 crore He said the budget, with an estimated revenue receipt of Rs 58,270.93 crore and an expenditure of Rs 59,295.28 crore, projected a revenue deficit of Rs 1024.34 crore. The capital expenditure, including loans and advances, was projected at Rs 10,799.30 crore. With this the total fiscal deficit would be Rs 11,823.64 crore.

"Taking into account the net public account, the overall deficit will be Rs 6.36 crore. This deficit will be made good by economy in expenditure and better tax administration," he said.

"For the first time in our country, this government has decided not to charge interest on co-operative crop loans to all farmers who repay the loans on time from the ensuing financial year. The government will pay that interest to the co-operative institutions. For this purpose, a provision of Rs 140 crore has been made in this budget," the finance minister said.

The budget has provided a total sum of Rs 5,236 crore for the agriculture sector under agriculture, animal husbandry, dairying and fisheries, co-operation, public works and revenue departments.

The budget has exempted pulses, grams, peas and peas dhal from purchase tax. Hand-made steel trunk, and tin containers also would be exempted. Tax on IT products like i-pod, MP3 and MP4 players, hand-made iron safe and branded pickles, ghee, dried grapes and bleach liquid, paper pin, safety pin gem clip, identity card clip examination board clip, rubber band and staple pin would be reduced to 4% from the present 12.5%.

The tax of 2% on the sale of sago and starch through Salem SAGOSERVE would be reduced to 1%.

Ambazhagan said, "necessary amendments would be brought in the provisions of the Tamil Nadu Value Added Tax AcT, 2006 and its rules to further simplify and fine-tune the procedures."

"During the last three years, entrepreneurs have come forward to establish 29 new industries in the state with an investment of Rs 37,595 crore with an employment potential of two lakh persons," he said. Of these, eight have already started production.

The Tamil Nadu Newsprint and Papers Ltd would expand capacity to 4 lakh tonne from 2.55 lakh tonne investing Rs 1000 crore by June 2010.

He said the metro rail project would be implemented through a public sector company Chennai Metro Rail Ltd with a total allocation of Rs 14,600 crore. Of this, Rs 11,680 crore would be the share of the state government and Rs 2920 crore would be the Centre's share. Out of the state's share, Japan International Co-operation Agency would give Rs 8,646 crore as loan and the balance Rs 3034 crore would be met from the state funds, the finance minister said. For 2009-10 the budget has provided Rs 600 crore.

Tenders for the first work of the project, the viaduct from Koyambedu to Ashok Nagar has been finalised, he said.

The other major capital expenditures would be for roads bridges Rs 3087 crore, maintenance of roads Rs 880 crore, food subsidy Rs 2800 crore, subsidy reimbursement to the Tamil Nadu Electricity Board for free power to the poor and farmers Rs 1608 crore.

The finance minister said the Eleventh Five Year Plan was being implemented with an outlay of Rs 85,344 crore from 2007-08. Rs 14,000 crore was spent in the first year, and Rs 16,000 crore during 2008-09. "This outlay has been further increased in 2009-10 and Plan schemes are proposed to be implemented at an outlay of Rs 17,500 crore," he said.