TAMILNADU: BUDGET 2008 – 2009

STATE BUDGET ANALYSIS

GSDP (current prices) 2006-07 Rs. 246,266 crores
GSDP (constant prices) 2006-07 Rs. 193,404 crores
Per capita net state domestic product (2006-07) Rs. 35,668
Revenue receipts (2008-09 BE) Rs. 51,236 crores
Revenue expenditure (2008-09 BE) Rs. 51,422
Revenue surplus (2008-09 BE) Rs. 84 crores
Plan expenditure (2007-08 BE) Rs. 16,522 crores
Developmental expenditure (2007-08 BE) Rs. 33,670 crores
Capital expenditure (2007-08 BE) Rs. 9,876 crores
Social welfare expenditure (2007-08 BE) Rs. 21,221 crores
Interest payment as percent of revenue expenditure (2008-09 BE) 10.82


Fiscal Indicators (2008-09 BE)
GFD/GSDP
(2.98)
RD/GSDP
0.03
OTR/GSDP
10.10
DEV/GSDP*
12.70
SSE/GSDP*
7.80
CO/GSDP
3.01
GFD/GSDP
(2.98)
RD/GSDP
0.03
OTR/GSDP
10.10
* 2007-08 (BE)
 

PART I: STATE FINANCES

Macro-economy
With a Gross State Domestic Product (GSDP) of Rs. 223,528 crores (current prices) in 2006-07, Tamil Nadu ranks fifth among major states of India, behind Maharashtra (Rs. 432,413 crores), Uttar Pradesh (Rs. 279,762 crores), West Bengal (Rs. 236,044 crores), and Andhra Pradesh (Rs. 236,034 crores), and almost the size of Gujarat (Rs. 247,681 crores). When measured in constant prices also, Tamil Naduís rank is 5. Tables 1 and 2 give the GSDP (current prices) and GSDP (constant prices) for key states, respectively. If projections are made based on average growth rates prevailing over the last five years, then Gujarat could be placed just ahead of Tamil Nadu.


Table 1: Gross state domestic product (current prices)

(Rs.crore)

State
2005-06
2006-07
2007-08 (E)
2008-09 (E)
Growth rate (%)
Andhra Pradesh 236,034 269,173 298,459 330,930 10.88
Gujarat 216,651 247,681 283,156 323,712 14.32
Karnataka 170,741 189,044 209,308 231,745 10.72
Kerala 118,998 132,739 146,952 162,687 10.71
Maharashtra 432,413 482,328 538,004 600,107 11.54
Tamil Nadu 223,528 246,266 274,378 308,136 9.08

Source: National Income Statistics, CSO; Estimates by BIU

Table 2: Gross state domestic product (constant prices)

(Rs.crore)

State
2005-06
2006-07
2007-08 (E)
2008-09 (E)
Growth rate (%)
Andhra Pradesh 190,957 207,904 222,207 237,494 6.88
Gujarat 169,354 186,586 205,571 226,488 10.18
Karnataka 135,563 143,547 152,001 160,953 5.89
Kerala 98,817 106,833 114,302 122,293 6.99
Maharashtra 339,425 363,450 389,175 416,721 7.08
Tamil Nadu 180,120 193,404 207,301 222,660 5.37

Source: National Income Statistics, CSO; Estimates by BIU

In terms of per capita net state domestic product (PCNSDP) current prices, Tamil Nadu ranks 12th in the country (Rs. 29,958), behind Haryana, Maharashtra and Punjab among major states. Among southern states, Tamil Nadu is just behind Kerala, but higher than the other three states. Estimates of GSDP growth as well as population growth reveal that Gujarat could lead in per capita NSDP over the next two years (Table 3).

Table 3: Per capita net state domestic product (current prices)

(Rs.)

State
2005-06
2006-07
2007-08 (E)
2008-09 (E)
Growth rate (%)
Andhra Pradesh 26,226 29,582 35,879 36,100 9.18
Gujarat 169,354 186,586 205,571 226,488 10.18
Karnataka 135,563 143,547 152,001 160,953 5.89
Kerala 98,817 106,833 114,302 122,293 6.99
Maharashtra 339,425 363,450 389,175 416,721 7.08
Tamil Nadu 180,120 193,404 207,301 222,660 5.37

Source: National Income Statistics, CSO; Estimates by BIU

Revenue receipts
In terms of quantum of revenue receipts at Rs. 51,236 crores (budget 2008-09 estimates), Tamil Nadu stands behind Maharashtra (Rs. 79,911 crores) and Andhra Pradesh (Rs. 70,927 crores). The state has shown a marginal revenue surplus, unlike Karnataka and Kerala, which has been a traditionally revenue deficit state. (Table 4)

Table 4: Revenue receipts/ expenditure and deficit position
(budget estimates 2008-09)


(Rs.crore)

State Revenue receipts Revenue expenditure Revenue surplus(+)
/deficit(-)
Andhra Pradesh 70,927 70,218 709
Gujarat 38,278 38,226 484
Karnataka 46,189 31,787 -2,973
Kerala 24,936 28,303 -3,367
Maharashtra 79,911 78,946 965
Tamil Nadu 51,506 51,422 84

Source: State Budget documents


Plan expenditure*
Tamil Nadu’s Plan expenditure of Rs. 16,522 crores (2007-08 estimates) is almost half of what Andhra Pradesh spends (Rs. 32,973 crores). Even Karnataka has a better Plan expenditure budget (Rs. 17,256 crores). (Table 5)

Table 5: Plan expenditure (Budget estimates 2007-08)

(Rs.crore)

State
2005-06
(Accounts)
2006-07
(RE)
2007-08
(BE)
Growth rate
(06-07 over 05-06)
Growth rate
(07-08 over 06-07)
Andhra Pradesh
14,502
22,822
32,973
57.37%
44.48%
Gujarat
11,113
14,004
14,409
26.01%
2.89%
Karnataka
11,131
16,458
17,256
47.86%
4.85%
Kerala
4,293
5,593
5,372
30.28%
-3.95%
Maharashtra
12,980
18,123
20,777
39.62%
14.64%
Tamil Nadu
9,505
14,625
16,522
53.87%
12.97%

Source: State finances; a study of budgets of 2007-08; RBI

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