TN budget for FY 2024-25 to be presented today

CHENNAI: Tamil Nadu Finance Minister Thangam Thennarasu will present the state budget for the financial year 2024-25 on Monday.

The budget whose theme is 'Crossing obstacles and marching towards growth' is being presented days before the announcement of the 2024 general elections.

With the ruling DMK aiming for a clean sweep and winning all the 39 seats in the parliamentary elections, it has to be seen whether this will be a popular budget or not.

The DMK government under Chief Minister M.K. Stalin has been pushing for several populist schemes and have implemented many since the party came to power in the state in 2021.

Of this, the 'Kalaignar Magalir Urimai Thittam' that grants Rs 1,000 per month to more than 1.5 crore women heads of families is the flagship social welfare prpgramme and the state budget will have certain measures to raise funds for such recurring expenditures.

A major aspect of this state Budget would be revenue augmentation to meet the expenditure for various schemes.

Tamil Nadu Governor R.N. Ravi has in his customary address on February 12, the first day of the Budget Session, said that the state was grappling with a severe stress on its fiscal resources in the aftermath of the flood-related disasters and that its capacity for resource mobilisation was constrained following the implementation of GST.

The State's Own Tax Revenue (SOTR), which accounts for 78.9 per cent of Tamil Nadu's total revenue, was projected to be ₹1,81,182 crore in 2023-24, a growth of 20.61 per cent from 2022-23, according to the budget estimates.

So far in 2023-24 (till December), the SOTR has been ₹1,09,708.78 crore, as per the provisional figures from the Comptroller and Auditor General (CAG), which constitutes about 60 per cent of the budget estimates.

In this context, it may be noted that the components of SOTR include collection from State Goods and Services Tax (SGST), taxes on vehicles, revenue from stamps and registration fees, VAT on petrol and diesel and liquor, The State Excise Duties (which reflect liquor revenue).

The state has increased excise duty on liquor from February 1 and this will well be a major source of revenue to offset the losses it has made due to the flood-related destruction. The changes made in the registration charges of flats will also help Tamil Nadu coffers to be filled in a major way.

However, even with these revenue-earning measures, Tamil Nadu is likely to fall short of its SOTR target for 2023-24, owing to impact of the floods and the destruction caused in many southern districts.