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The financial situation of the Tamil Nadu government showed signs of improvement, although it was too early to draw any clear conclusions on the fiscal position.
Compared with 2021-22, i.e., in 1921-22, the ratio of capital expenditure to total expenditure gradually rose to 13% after gradually increasing to 10.4% in 2017-18. Likewise, it can be seen that while there are still a large amount of borrowing to fund income expenditures, the share of capital expenditures in net public debt or net borrowing is still rising.
The increase in capital expenditure to net borrowing and figures for total expenditures indicate that more and more money is used to create or acquire assets of a lasting nature. Fifteen years ago, nearly 86% of public debt went to capital expenditures. Since then, the share has steadily dropped to about 44% over the 2021-22 years. Since then, consistent efforts have been made to stop this trend and improve the proportion. It is estimated to be about 55% based on budget estimates for the coming year.
It would be better if the state government could cut substantial subsidies and transfers for electricity, transportation and public distribution systems (PDS). Take the PDS as an example: While proposals to disturb the existing rice supply (including non-advantage families) for all ration cardholders (including non-priority families) will not be entertained by political supervisors at any time, the government cannot increase the sales price of Palmolein Oil (Rs 30 per liter) and “Tur dhal) and “Tur dhal” (Rs 25 per kilogram) (Rs 79.15 per kilogram) and “Palmolein Oil) (Rs 118.91 per kilogram). As of now, the government subsidy is Rs 79.15 per kilogram and Rs 118.91 per liter of palm oil.
In a given case, the government must be approximately Rs 48 billion per year. In the coming year, the overall food subsidy bill is expected to be 140,000 crore. As far as Tamil Nadu Power Plants Company is concerned, the state government will provide tariff subsidies in the next year of Rs 170 crore and provide a loss fund of Rs 77 billion.
As far as the transport company is concerned, the different types of subsidies are around Rs 724 billion, which includes free women’s bus trips. A senior policymaker believes that the government should send a strong message that it will not be able to provide endless financial support to any utility, which should take immediate steps to effectively improve operational efficiency.
publishing – March 20, 2025 04:57 pm ist
