The Hindu : Tamil Nadu News : Rollbacks will not invite new taxes

Online edition of India's National Newspaper
Saturday, Jul 24, 2004

Tamil Nadu

Tamil Nadu

Rollbacks will not invite new taxes

By Our Special Correspondent

CHENNAI, JULY 23. Though the Tamil Nadu Budget for 2004-2005 projected a closing deficit of Rs.590.47 crores, the Finance Minister, C.Ponnaiyan, today expressed confidence that the shortfall and the financial burden caused by the rollbacks to the tune of Rs.1,295.96 crores would not require levying new taxes.

In his reply to the general discussion on the Budget in the Assembly, he said the Government would be able to end the current financial year without any budgetary deficit. There could even be a small surplus if revenue collections exceeded the expectations.

Mr.Ponnaiyan said the State would be meeting a total commitment of Rs.1795.96 crores by the State's additional share of Central taxes to the tune of Rs.721.02 crores. Austerity measures proposed in all departments through a 5 per cent cut in expenditure would fetch Rs.450 crores. The Government was targeting Rs. 970 crores from commercial taxes (CT), Rs.415 crores from the Registration department and Rs.100 crores from the Tamil Nadu Housing Board (TNHB). However, taking Rs.400 crores conservatively as additional revenue from the Commercial Taxes and Registration departments and the TNHB, the Government would have to meet the remaining 224.94 crores by way of market borrowings.

He also made it clear that the rollbacks would not affect the fiscal management. The Government, which acquired an "empty treasury" from the previous Government, had to introduce a series of reforms to prevent a "fiscal breakdown", but the Chief Minister resorted to the rollbacks in response to people's sentiments.

`No valid criticism'

Referring to the decision of the Dravida Munnetra Kazhagam (DMK) and its allies to boycott the Assembly, he said they did not have any valid criticism against the Budget, which took taken care of the interests of all sections, allocating funds for all departments.

Justifying the Government's decision to have a shorter Budget session, he said as per law the Appropriation Bill must passed before July 31. The Opposition Members were aware that this was not the first time that the demands for grants were passed without a debate, he said recalling that 48 demands were passed without a debate in 1957-58; 45 in 1962-63; 47 in 1967-68; and 58 in 1979-80.

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