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On February 19, 2024, Thangam Thennarasu, the Finance Minister of Tamil Nadu, presented the state’s budget in the Tamil Nadu Assembly. The budget, framed under the theme “Crossing obstacles and marching towards growth,” places a significant emphasis on augmenting revenue to cover various scheme expenditures.

Economic Scenario:

According to the Ministry of Statistics and Programme Implementation, Tamil Nadu’s real Gross State Domestic Product (GSDP) grew at 8.19 percent in 2022–23, with a nominal GSDP growth of 14.16 percent. The estimated nominal GSDP for 2023-24 is 15.14 percent, emphasizing Tamil Nadu’s role as a growth engine for the country. The budget forecasts a nominal GSDP growth of 15.89 percent for 2024-25, attributing it to government measures aimed at attracting investment, generating employment, and fostering comprehensive and sustainable growth.

Revenue and Expenditure:

Total Revenue Expenditure:

The budget acknowledges a revenue shortfall of approximately Rs.20,000 crore per annum due to the termination of the GST compensation regime since June 30, 2022. Despite challenges such as severe floods and storms, the Total Revenue Expenditure is estimated at Rs. 3,17,484 crore in the Revised Estimates (RE) 2023-24, a prudent increase from the Budget Estimates (BE) of Rs. 3,08,056 crore. The BE for Total Revenue Expenditure in 2024-25 is estimated at Rs. 3,48,389 crore, mainly driven by an additional allocation for the Kalaignar Magalir Urimai Thogai Thittam (Kalaignar Women’s Right Amount Scheme).

States’ Own Tax Revenue and Non-Tax Revenue:

In 2023-24, States Own Tax Revenue (SOTR) RE is estimated at Rs.1,70,147 crore, accounting for 78.9% of the state’s Total Revenue. The BE for SOTR in 2024-25 is Rs.1,95,173 crore, indicating a higher growth of 14.71 percent. States Non-Tax Revenue (SNTR) in 2023-24 is estimated at Rs.30,381 crore, with a significant increase attributed to revenue augmentation measures. The SNTR for 2024-25 is estimated at `30,728 crore.

Transfers – Share in Central Taxes and Grant-in-Aid:

The RE for Grants-in-Aid is estimated at Rs.26,966 crores, slightly lower than BE, while the RE for Share in Central Taxes has increased to Rs.45,053 crores. With GST compensation dues terminated, the BE for Grant-in-Aid in 2024-25 is Rs.23,354 crore. The estimated amount allocated for Share in Central Taxes for 2024-25, based on the Union Budget 2024-25, is Rs.49,755 crore.

Total Revenue Receipts:

Total Revenue Receipts for 2024-25 are estimated at Rs.299,009.98 Crore, reflecting a 10.53% increase over BE 2023-24 and a 9.71% increase over RE 2023-24.

Revenue and Fiscal Deficit:

Revenue Deficit:

The Revenue Deficit for 2024-25 is projected at Rs. 49,279 crore, representing a significant surge compared to the RE of 2023-24. Excluding the loss funding amount of Rs.Rs 14,442 crore to TANGEDCO, the projected Revenue Deficit is Rs. 34,837 crore for 2024-25, less than the BE of 2023-24.

Fiscal Deficit:

The Budget Estimate of Fiscal Deficit for 2024-25 is Rs. 1,08,690 crore, representing 3.44 percent of GSDP. The state follows the 15th Finance Commission’s recommendation of a glide path to fiscal consolidation, reducing the Fiscal Deficit from 3.46 percent in 2022-23 to 3.44 percent in 2024-25.

Capital Expenditure:

For 2024-25, the Budget Estimates for Capital Expenditure are Rs.47,681 crore, a 12.11 percent increase over the RE of 2023-24.

Conclusion:

The Tamil Nadu Budget for 2024-25 focuses on the “7 grand Tamil dreams,” including social justice, welfare of the marginalized, transforming Tamil youth into global achievers, equality focusing on women’s welfare, and a knowledge-based economy. 

The budget introduces the “Kalaignarin Kanavu Illam” (Kalaignar’s Dream House Scheme), aiming to provide 8 lakh concrete houses in rural areas by 2030. Despite financial constraints, the budget is forward-looking, incorporating initiatives like creating a Space Industrial and Propellant Park, organizing the Global Startup Summit, upgrading IT infrastructure, and attracting investments. The budget aligns with the hope of fulfilling the dreams of the Tamil Nadu people.