Chennai: The Tamilnadu government has tabled a Bill in the Assembly seeking to amend the Tamilnadu Fiscal Responsibility Act, 2003 to extend the time limit set out to eliminate the revenue deficit and reduce fiscal deficit to three per cent of the Gross State Domestic Product (GSDP) by 31 March, 2024.
The Bill was tabled by Finance Minister Palanivel Thiagarajan. According to the Statement of Objects and Reasons of the Bill, the 15th Finance Commission, in its report for 2021-26, has recommended an extra annual borrowing space for the States, of the magnitude of 0.50 per cent of their GSDP for each of the first four years of the award covering the period 2021-22 to 2024-25, based on certain performance criteria in the power sector.
Further, the Finance Commission has also recommended fixing the net borrowing limit to GSDP at four per cent, 3.5 per cent and three per cent for the years 2021-22, 2022-23, 2023-24 to 2025-26 respectively, it said.
Based on this, the Government has decided to amend the Act to extend the time limit set out to eliminate the revenue deficit and reduce fiscal deficit to three per cent of the GSDP by 31 March, 2024. The Bill seeks to give effect to the above decision.