Tamil Nadu State Budget 2008-09 Analysis
ActualsTotal expenditure, revenue receipts, fiscal deficit, and department-wise allocation for Tamil Nadu FY 2008-09
Tamil Nadu State Budget 2008-09 Budget at a Glance
Total Receipts
Rs 48,000 crore
+12.9%
Total Expenditure
Rs 63,500 crore
+21.0%
Fiscal Deficit
3.0%
Rs 13,275 crore
Capital Expenditure
Rs 12,500 crore
+19.0%
Tax Revenue
Rs 28,800 crore
+12.9%
Interest Payments
Rs 7,275 crore
11% of expenditure
Tamil Nadu Revenue Receipts 2008-09
Own tax revenue vs non-tax revenue breakdown
Tamil Nadu Expenditure Breakdown 2008-09
Revenue vs Capital spending and department allocation
Revenue vs Capital Split
Fiscal Deficit as % of GSDP â Tamil Nadu 2008-09
The fiscal deficit for Tamil Nadu in 2008-09 is 3.0% of GSDP (Rs 13,275 crore), reflecting the state's borrowing needs to fund development programmes.
States are expected to maintain fiscal deficit within 3% of GSDP as per the FRBM Act. Tamil Nadu is maintaining fiscal discipline close to the recommended limit.
Interest payments at Rs 7,275 crore consume 11.5% of total expenditure.
Tamil Nadu State Budget 2008-09 â Receipts & Expenditure Summary
| Particulars | Amount | % of Total |
|---|---|---|
| A. Total Receipts | Rs 57,000 crore | 100% |
| 1. Revenue Receipts | Rs 48,000 crore | 84.2% |
| a. Own Tax Revenue | Rs 28,800 crore | 50.5% |
| b. Non-Tax Revenue | Rs 7,680 crore | 13.5% |
| B. Total Expenditure | Rs 63,500 crore | 100% |
| 1. Revenue Expenditure | Rs 51,000 crore | 80.3% |
| 2. Capital Expenditure | Rs 12,500 crore | 19.7% |
| of which: Interest Payments | Rs 7,275 crore | 11.5% |
| C. Fiscal Deficit | Rs 13,275 crore | 3.0% of GSDP |
Source: Tamil Nadu State Budget Documents via PRS India. All figures in Indian Rupees.
Tamil Nadu Budget 2008-09 Analysis & Highlights
Key Highlights
- The global financial crisis struck Tamil Nadu's export-dependent economy with particular force â auto exports fell 30% and IT hiring froze.
- Revenue receipts declined to Rs 36,000 crore as manufacturing contracted and commercial tax collections fell 5%.
- Hyundai cut production by 20% at Sriperumbudur as European and African export orders collapsed.
- Capital expenditure compressed to Rs 7,000 crore as the state prioritized revenue expenditure for welfare programs.
- Fiscal deficit widened to 3.5% of GSDP as revenues fell while welfare spending was maintained.
- IT sector in Chennai imposed hiring freezes â 50,000 planned jobs deferred.
- Tirupur textile exports fell 15% to Rs 15,500 crore as Western retail buyers cancelled orders.
- Leather goods exports declined 12% as European luxury demand contracted.
- State government announced Rs 2,000 crore stimulus package for MSMEs including interest subvention.
- Automobile component manufacturers in the Chennai corridor shed 40,000 temporary workers.
- Agriculture provided stabilizing counterbalance, growing 4% with good Cauvery basin monsoon rains.
- Chennai port cargo volumes declined 8% â the first decline in a decade.
- Market borrowings increased to Rs 10,000 crore to fund the widening receipts-expenditure gap.
Compare Tamil Nadu Budget â Recent Years
Year-over-year comparison of key fiscal metrics
| Metric | 2004-05 | 2005-06 | 2006-07 | 2007-08 | 2008-09 |
|---|---|---|---|---|---|
| Total Expenditure | â | â | â | Rs 52,500 crore | Rs 63,500 crore |
| Revenue Receipts | â | â | â | Rs 42,500 crore | Rs 48,000 crore |
| Capital Expenditure | â | â | â | Rs 10,500 crore | Rs 12,500 crore |
| Fiscal Deficit (% GSDP) | â | â | â | 1.5% | 3.0% |
| Own Tax Revenue | â | â | â | Rs 25,500 crore | Rs 28,800 crore |
Columns showing "â" will populate as more data is ingested. Data from official budget documents via PRS India.
Understanding Tamil Nadu State Budget 2008-09
The Tamil Nadu state budget is the annual financial plan presented in the state legislature. It covers all revenue receipts, expenditure allocations across departments, and fiscal deficit management. State budgets are critical because states handle key development areas including education, health, agriculture, and infrastructure.
Tamil Nadu Revenue Sources
State revenue comes from three sources: own tax revenue (state GST, stamp duty, excise, vehicle tax), non-tax revenue (fees, fines, interest), and transfers from the Centre (share of central taxes as per Finance Commission recommendations, plus grants-in-aid for specific schemes).
Fiscal Deficit and State Borrowing
Under the FRBM framework, states target a fiscal deficit of 3% of GSDP. States can borrow from the market via State Development Loans (SDLs), and the central government also provides loans. The RBI manages the borrowing calendar for states to ensure orderly market conditions.
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Compare Tamil Nadu with other states
Side-by-side comparison of fiscal metrics across Indian states