Tamil Nadu borrowing down 17% so far this fiscal year


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Borrowing in the Tamil Nadu market in the first nine months of fiscal year 2021-2022 was around 17% lower than last year, amid improving income.

The state borrowed 52,000 crore in April-December 2021, compared to 63,000 crore in the same period last year. Borrowing was made through the auction of government bonds or government development loans.

Tamil Nadu’s revenues rebounded after the second wave of COVID-19. Its total revenue increased by around 22% to 1,18,992.48 yen in April-November 2021, compared to 97,635.78 yen in the same period last year. Total revenue collected so far stands at 58.76% of the ₹ 2,02,495.89 crore estimated in the revised budget for 2021-2022, according to unaudited provisional figures from the Comptroller and Auditor General.

Total revenue includes tax revenue, non-tax revenue, grants and contributions. Tax revenue comes from direct government-specific sources such as the state GST, stamps and registration fees, land receipts, the tax on petroleum products and revenues from alcohol sales and the share of the state in central and other taxes and levies.

Tax revenues were boosted by the Union government which transferred 3,878.38 crore to the state last November. The state also obtained 8,095 crore in consecutive GST compensation loan from the Union government for 2021-2022. Tamil Nadu’s revenue expenditure was 1,26,862.35 yen in April-November 2021.

As a result, the revenue shortfall (which involves expenditure of revenue greater than revenue) stood at approximately 7,869.87 crore as in November 2021, lower than the 10,126.14 crore posted in October 2021.

For 2021-2022, Tamil Nadu estimated its income shortfall at 58,692.68 yen crore. But Finance Minister Palanivel Thiaga Rajan said it would be cut. Tamil Nadu recently announced new restrictions amid a sharp rise in COVID-19 cases, including those of the Omicron variant of the new coronavirus. Any tighter restrictions will impact revenue collection, which will lead to more borrowing. The state budget deficit (the difference between total revenue and expenditure) stood at 30,051.71 yen crore as in November 2021.

Maharashtra, Tamil Nadu, West Bengal, Uttar Pradesh, Andhra Pradesh, Rajasthan and Telangana are the top borrowing states so far for this fiscal year, accounting for 65% of total borrowing, according to CareEdge Ratings .

Tamil Nadu will raise Yen 1,000 crore on Tuesday with the reissuance of 24-year state development loans.

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