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Tamil Nadu revenue deficit down by Rs 30,000 crore, says FM Palanivel Thiaga Rajan

by economictimes.indiatimes.com Leave a Comment

Synopsis

“In accordance with the mandate of the Fiscal Responsibility Act of achieving zero-revenue deficit, the State will adopt a smooth glide path without compromising on our welfare initiatives and developmental priorities,” he said.

The Tamil Nadu government has reduced the annual revenue deficit by about Rs 30,000 crore in the revised estimates of the current year, from about Rs 62,000 crore inherited when the DMK assumed office nearly two years ago, Finance Minister Palanivel Thiaga Rajan said on Monday. Presenting a tax-free budget for 2023-24 in the Assembly, he said the government’s measures have helped to reduce the revenue deficit.

“This was approximately Rs 5,000 crore lower than the level of the pre-COVID year of 2019-20,” he said.

“In accordance with the mandate of the Fiscal Responsibility Act of achieving zero-revenue deficit, the State will adopt a smooth glide path without compromising on our welfare initiatives and developmental priorities,” he said.

Fall in tax revenue in the previous years was the main reason for the fiscal stress faced by the government at the time of assuming office, he claimed.
The State’s own tax revenue (SOTR) is estimated to increase to Rs 1,51,870.61 crore in the revised estimates, as compared to Rs 1,42,799.93 crore in the Budget estimates for 2022-23. In the coming years, the SOTR is estimated to further increase to Rs 1,81,182.22 crore, which is a growth of 19.30 percent over the revised estimates.

The SOTR is estimated at Rs 15,309.40 crore in the revised estimates, similar to the projections in Budget estimates for 2022-23. In the coming years, it is estimated to be at Rs 20,223.51 crore, which is an increase of 32.10 percent over the revised estimates.

Since 2015-16 when the revenue deficit breached the 1 per cent GSDP mark for the first time, the finances deteriorated continuously with revenue deficit increasing in leaps and bounds to reach 3.28 percent in 2020-21.

“This government through reforms of unprecedented scale and scope, has not only managed to arrest but also actually reversed the declining trend by bringing down revenue deficit by record levels to 1.23 per cent of the GSDP, close to the ratio of 2015-16,” the Finance Minister said.

In the coming years, despite the inclusion of an amount of Rs 7,000 crore for ‘Magalir Urimai Thogai’ scheme (Rs 1,000 to women heads of eligible households) — one of the biggest cash transfer schemes implemented by any State government in the history of this country — the revenue deficit of the State has been contained at 1.32 per cent of the GSDP much below the levels of 2017-18, he said.

In the Budget estimates for 2023-24, the revenue deficit is estimated at Rs 37,540.45 crore.

The government has given a further push to the capital expenditure in the State in this budget providing an allocation of Rs 44,365.59 crore. The total capital outlay of the State including net loans and advances is estimated at Rs 54,534.46 crore.

The fiscal deficit has been estimated at Rs 74,524.64 crore. The net borrowings in 2023-24 is projected at Rs 91,866.14 crore.

The revenue expenditure is estimated at Rs 3,08,055.68 crore. The major components include: expenditure on account of salaries to government staff estimated to be Rs 77,240.31 crore, subsidies for power utility TANGEDCO and transfers on account of implementing the ‘Magalir Urimai Thogai’ is estimated to be at Rs 1,22,088.19 crore.

“We are well on our way to becoming a revenue-neutral State again, which will form the ideal condition for investment and growth… I wish to point out that this government has announced new projects and schemes involving expenditure of over Rs 1 lakh crore since assuming office on May 7, 2021,” Rajan said.

He claimed that Tamil Nadu’s growth is higher than the national GDP which is a positive sign, and this growth advantage is expected to continue in the coming year though a potential slowdown in the global economy, as many anticipate, could reduce all growth rates at the State and national level, he pointed out.

The State will attempt to maintain a healthy growth in revenue receipts through resource augmentation and improvement in revenue collection efficiency, the Finance Minister added.

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India state-run banks’ gross NPA eases to 5.53%; earn profit of Rs 70,167 cr in Apr-Dec FY23

by bfsi.economictimes.indiatimes.com Leave a Comment

The government has taken various reforms following which asset quality of public sector banks has improved significantly with gross NPA ratio declining from the peak of 14.6 per cent in March 2018 to 5.53 per cent in December 2022, Parliament was informed on Monday.

All PSBs are in profit with aggregate profit being Rs 66,543 crore in 2021-22, and that further increased to Rs 70,167 crore in first nine months of current financial year, Minister of State for Finance Bhagwat K Karad said in a written reply to Lok Sabha.

At the same time, resilience has increased with provision coverage ratio of PSBs rising from 46 per cent to 89.9 per cent in December 2022, he said, adding capital adequacy ratio of PSBs improved significantly from 11.5 per cent in March 2015 to 14.5 per cent in December 2022.

Total market cap of PSBs (excluding IDBI Bank , which was categorised as private sector bank in January 2019) increased from Rs 4.52 lakh crore in March 2018 to Rs 10.63 lakh crore in December 2022, he said.

Karad also said banks, earlier placed under Prompt Corrective Action (PCA) framework by RBI , have made significant improvement.

Talking about various measures taken to improve the financial health of PSBs, Karad said, the government implemented a comprehensive 4R strategy of Recognising NPAs transparently, Resolution and recovery, Recapitalising PSBs, and Reforms in the financial ecosystem.

Major banking reforms undertaken by the government over the last eight years addressed credit discipline, responsible lending and improved governance, besides adoption of technology, amalgamation of banks, and maintaining general confidence of bankers, he said.

In reply to another question, Karad said, as per the information provided by Ministry of Road Transport & Highways (MoRTH), the total estimated vehicle fleet is 30.48 crore (excluding data from Madhya Pradesh, Andhra Pradesh and Lakshadweep), of which 16.54 crore vehicles are uninsured.

Replying to another question, Karad said the government since 2016 has given ‘in-principle’ approval for strategic disinvestment of 36 cases of public sector enterprises (PSEs) and/or subsidiaries/ units/ joint ventures of PSEs/ banks.

Of the 36 cases, 33 are being handled by Department of Investment and Public Asset Management (DIPAM) and 3 cases are being handled by the respective Administrative Ministry/Department, he said.

“Out of the 33 cases being handled by DIPAM, strategic disinvestment transactions have been completed in 10 cases; 5 PSEs are under consideration for closure; 1 case is held up due to litigation, 1 case is under Corporate Insolvency Resolution Process (CIRP) in NCLT and 2 transactions are under review for feasibility,” he said, adding, remaining 14 transactions are at various stages.

In other PSEs, where the government continues to retain control, disinvestment through minority stake sale is carried out through various SEBI-approved methods such as initial public offer (IPO), offer for sale (OFS), buyback of shares etc. from time to time based on prevailing market conditions and investor interest, he said.

The modernisation and capacity expansion of PSEs are taken up by the respective boards of PSEs under the administrative control of different ministries, he added.

No direction on loading Rs 2,000 notes in ATMs: FM Sitharaman

by bfsi.economictimes.indiatimes.com Leave a Comment

No instructions have been given to banks for filling or not filling Rs 2 ,000 notes in Automated Teller Machines (ATMs) as lenders make their own choice for loading of cash vending machines, Parliament was informed on Monday. As per Annual Reports of the Reserve Bank of India ( RBI ), the total value of Rs 500 and Rs 2,000 denomination bank notes in circulation as at end-March 2017 and as at March-end 2022 was Rs 9.512 lakh crore and Rs 27.057 lakh crore, Finance Minister Nirmala Sitharaman said in a written reply in Lok Sabha .

“No instructions have been given to banks for not filling Rs 2,000 notes in ATMs. Banks make their own assessment of amount and denominational requirement for ATMs on the basis of past usage, consumer requirement, seasonal trend, etc,” she said.

Replying to another question, the finance minister said, total amount of the central government debt/liabilities is estimated at about Rs 155.8 lakh crore (57.3 per cent of GDP) as on March 31, 2023.

Out of this, she said, external debt valued at current exchange rate is estimated at Rs 7.03 lakh crore (2.6 per cent of GDP).

“Share of external debt is only about 4.5 per cent of total debt/liabilities of the central government and less than 3 per cent of GDP. External debt is mostly financed by multilateral and bilateral agencies at concessional rates. Therefore, the risk profile stands out as safe and prudent,” she said.

RBI in consultation with the government has announced various measures recently to diversify and expand the sources of forex funding to mitigate exchange rate volatility and global spillovers, she said.

It included, “fresh FCNR(B) and NRE deposits were exempted from the extant regulation on interest rates (i.e. interest rates shall not be higher than those offered by the banks on comparable domestic rupee term deposits) till October 31, 2022.”

The external commercial borrowing limit under automatic route has been raised to USD 1.5 billion and the all-in-cost ceiling has been raised by 100 basis points in select cases up to December 31, 2022, she said.

In order to promote the growth of exports from India and to support the increasing interest of the global trading community in the Indian rupee, she said, RBI has put in place an additional arrangement for invoicing, payment, and settlement of exports/imports in the rupee on July 11, 2022 etc.

Tax demands of Rs 13,566 crore raised in four fiscals under black money law: MoS Finance

by economictimes.indiatimes.com Leave a Comment

Synopsis

In the four fiscals starting 2018-19, a total of 349 assessment orders were passed and a demand totalling Rs 13,566 was raised.

The income tax department raised tax demands amounting to Rs 13,566 crore during the last four financial years under the black money law to deal with undisclosed foreign income and assets, the government told Parliament on Monday. In a written reply to a question in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary informed that 183 assessment orders were passed in 2021-22 and a demand of Rs 5,350 crore was raised under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

In the four fiscals starting 2018-19, a total of 349 assessment orders were passed and a demand totalling Rs 13,566 was raised.

The minister also informed that 648 disclosures involving undisclosed foreign assets worth Rs 4,164 crore were made during three months of a one-time compliance window, which closed on September 30, 2015, under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

The amount collected by way of tax and penalty in such cases was about Rs 2,476 crore.

Chaudhary further said whenever any instance of unaccounted/black money comes to its notice, the income tax department takes appropriate actions as per the provisions of the Income- tax Act, 1961.

Such actions include conducting searches and surveys, assessment of income, levy of tax, imposition of penalty, and launching of prosecution, among others.

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Gold Price Today: Yellow metal crosses Rs 60,000 mark for the first time

by economictimes.indiatimes.com Leave a Comment

Synopsis

“Bullion was purchased as a safe haven after the sudden fallout of the SVC bank and other banks. The US bond rates saw unprecedented weakness, the dollar index fell, and gold prices increased. In view of the banking crisis and conflicting US economic statistics, the Fed is expected to convene this week on March 22. The policy outcomes may provide further guidance for the bullion markets,” said Rahul Kalantri, VP Commodities, Mehta Equities.

In the aftermath of the American banking crisis, gold prices soared to a lifetime high on MCX in Monday’s trade, crossing the Rs 60,000 mark per 10 grams.

MCX Gold futures hit a new lifetime high of Rs 60,100 per 10 grams and were trading at Rs 60,020 around 12:50 pm, up by Rs 637 or 1.07%.

“Bullion was purchased as a safe haven after the sudden fallout of the SVC bank and other banks. The US bond rates saw unprecedented weakness, the dollar index fell, and gold prices increased. In view of the banking crisis and conflicting US economic statistics, the Fed is expected to convene this week on March 22. The policy outcomes may provide further guidance for the bullion markets,” said Rahul Kalantri, VP Commodities, Mehta Equities.

Anuj Gupta, Vice President (VP), Commodity and Currency Research, IIFL Securities sees yellow metal hitting the Rs 62,000 mark over the next one month. His strategy on April gold futures is to buy on dips at levels around Rs 60,000.

The international prices could test levels between $2,050 and $2,080, Gupta said.

Bullion prices have also benefited from the doubts over whether the Federal Reserve had enough headroom to keep raising interest rates, given the growing pressure on the economy, Gupta said. Gold, which is seen as a haven at times of uncertainties, has got the biggest boost amid the ongoing crisis and looming recessionary fears, the IIFL Securities analyst said.

“The US Fed is scheduled to meet this week and their policy outcomes in light of the banking crisis and mixed US economic indicators could give more direction to bullion markets,” Manoj Kumar Jain, Prithvifinmart Commodity Research, said.

The two-day US Federal Reserve’s Federal Open Market Committee (FOMC) meeting begins on Tuesday.

Meanwhile, May Silver futures were also trading in the green, shedding morning losses. They were trading at Rs 69,222, up by Rs 721 or 1.05%.

“Silver may test 69,800 to 71,000 ($23.30 & $24) levels very soon. We are recommending buying Gold and Silver at the support levels,” Gupta further said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times

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