Chennai: Tamil Nadu Chief Minister O. Panneerselvam, who also holds the finance portfolio, presented a tax-free budget for fiscal 2015-16 here on Wednesday, while announcing various concessions on value added tax (VAT).
Panneerselvam said the government had decided against imposing additional taxes despite the severe financial burden and the slow growth in the state’s tax revenues.
Panneerselvam exempted fishing accessories like ropes, floats, twine, fishing lamps and swivels from VAT.
Similarly, mosquito nets have been exempted from VAT.
Panneerselvam reduced the VAT rates on cardamom, LED lamps, air compressors, cell phones and pump sets.
He said the electricity tax on power generating plants using biomass would be withdrawn.
According to him, the government has estimated the revenue deficit for 2015-16 at Rs.4,616.02 crore with revenue receipts projected at Rs.142,681.33 crore and the revenue expenditure put at Rs.147,297.35 crore.
He said the revenue deficit is inevitable owing to increased subsidies, slow tax growth and allocations to social sectors.
Projecting a capital expenditure of Rs.27,213.17 crore, the fiscal deficit is estimated at Rs.31,829.19 crore.
The major revenue streams for the state are commercial taxes (Rs.72,068.40 crore), state excise (Rs.7,296.66 crore), motor vehicles tax (Rs.4,882,53 crore).
The tax revenue is expected to log a modest growth of around 12 percent over last fiscal.
Panneerselvam said the share of central taxes is projected at Rs.21,149.89 crore while grants-in-aid from the central government will be Rs.16,376.79 crore.
He said the state’s net borrowings would be raised to Rs.30.446.68 crore against the permissible levels of Rs.32,990 crore.
The total outstanding debt for the state by the end of the fiscal is estimated at Rs.211,483 crore.