Thursday, Mar 28, 2002
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By Suresh Nambath
The Tamil Nadu Finance Minister, C. Ponnaiyan, presenting the State budget for 2002-03 in the Assembly on Wednesday. The Chief Minister, Jayalalithaa, leafs through the text. — Photo: K. Gajendran
CHENNAI, MARCH 27. Moving ahead with fiscal reforms to overcome the financial crisis, the Tamil Nadu Finance Minister, C. Ponnaiyan, imposed new levies, including an infrastructure surcharge of five per cent on sales tax paid on almost all commodities in the budget for 2002-03 presented in the State Assembly today, to raise revenue by about Rs. 690 crores. While withdrawing the sales tax exemption for rice, wheat, jaggery, pepper, pulses and grams, he exempted rice, wheat, kerosene, LPG, IMFL and Declared Goods from the new surcharge which alone would bring in Rs. 230 crores. Also, he proposed a one per cent tax on resale of all commodities excluding rice, wheat, pulses and grams, IMFL, petroleum products and other Declared Goods which would be payable by second and subsequent sellers. In view of the serious financial situation, the Chief Minister, Jayalalithaa, had requested the Centre for a one-time assistance package of Rs. 3,000 crores, the Minister said. Apart from signing a MoU for a medium-term fiscal reform programme with the Centre, the Government decided to appoint a Tax Reforms and Revenue Augmentation Commission with Raja J. Chelliah as the head. A disinvestment commission would be set up to frame guidelines for disinvestment in profit-making public sector units and for privatisation of loss making ones. By way of rationalisation of subsidies, a coupon system would be introduced for issue of rice under the public distribution system from July 1. These rice drawal coupons, to be distributed once a year to the family cardholders, would prevent bogus billing and large-scale diversion. A comprehensive metering of all electricity connections would be taken up to check power theft and calculate transmission and distribution losses. To securitise the outstanding dues of TNEB, the Government would float tax-free bonds with an interest rate of 8.5 per cent to fund a one-time settlement of dues with the Central utilities. A zero-base budgeting exercise would be undertaken to weed out schemes that have outlived their purpose. A Guarantee Redemption Fund would be constituted to ensure prompt payment of the guaranteed liabilities in cases of invocation by lending agencies. A new scheme for one-time settlement of outstanding dues of people from rural and urban areas from the cooperative sectors would benefit 4.5 lakh borrowers. The relief would be about Rs.110 crores. With the tax measures, the overall deficit in the budget estimates would come down to Rs.640.24 crores. Describing the budget as ``growth-oriented'', Ms. Jayalalithaa said it would not adversely affect any section of the society. Her promises to the people of Andipatti had been fulfilled in the budget.
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