Tamil Nadu Finance Minister Palanivel Thiaga Rajan said Tamil Nadu is poised to hike its capital expenditure over three-fold in three years in view of the improving financial position.
“We are going to go to something like Rs 90,000-95,000 crore a year in capital expenditure from the current level of Rs 25,000 crore a year,” he said while inaugurating the 12th edition of the Annual Finance Conclave on Wednesday. The conclave was organised by the Confederation of Indian Industry, Tamil Nadu, in Chennai.
Thiaga Rajan said that the state used to have capital expenditure close to 3-4 per cent of the Gross State Domestic product (GSDP) every year, but dropped from 2014 onwards, to about 1 per cent of the GSDP during the Corona pandemic. The capital expenditure that was 1.5 per cent of the GSDP in 2021-22 could go up to 2.5-3 per cent this year, Thiaga Rajan added.
He said Tamil Nadu’s revenue deficit had been reduced by Rs 16,000 crore in 2021-22 resulting in the fiscal deficit being better than the revised estimates. The fiscal deficit – 3.38 per cent of the GSDP in 2021-22 – was lower than the 3.85 per cent norm set by the Union government, he added.
As per the recommendations of the 15th Finance Commission, which were accepted by the Union government, states can roll over the remaining borrowing capacity from last year, he pointed out.