Tamil Nadu Budget Analysis

2022-23
The Finance Minister of Tamil Nadu, Dr. Palanivel Thiaga Rajan, presented the Budget for the state for the financial
year 2022-23 on March 18, 2022.
Budget Highlights
▪ The Gross State Domestic Product (GSDP) of Tamil Nadu for 2022-23 is projected to be Rs 24,84,807
crore (at current prices), a growth of 14% over the revised estimate of GSDP for 2021-22 (Rs 21,79,655
crore). In 2021-22, GSDP (at current prices) is estimated to grow by 14.6% over the previous year.
▪ Expenditure (excluding debt repayment) in 2022-23 is estimated to be Rs 3,33,251 crore, an increase of
11% over the revised estimates of 2021-22 (Rs 3,00,651 crore). In addition, debt of Rs 27,128 crore will be
repaid by the state in 2022-23. In 2021-22, expenditure (excluding debt repayment) is estimated to be 3%
lower than the budget estimate.
▪ Receipts (excluding borrowings) for 2022-23 are estimated to be Rs 2,36,638 crore, an increase of 13%
over the revised estimates of 2021-22 (Rs 2,09,824 crore). In 2021-22, receipts (excluding borrowings) are
estimated to be 1% higher than the budget estimate.
▪ Fiscal deficit for 2022-23 is targeted at Rs 90,114 crore (3.63% of GSDP). In 2021-22, as per the revised
estimates, fiscal deficit is expected to be 3.80% of GSDP, lower than the budget estimate of 4.33% of GSDP.
▪ Revenue deficit in 2022-23 is estimated to be Rs 52,781 crore (2.12% of the GSDP). In 2021-22, revenue
deficit is estimated to be 2.54% of GSDP, lower than the budget estimate of 2.75% of GSDP.
Policy Highlights
▪ Education: ‘Perasiriyar Anbazhagan School Development Scheme’ will be launched to modernise
government schools over next five years. A knowledge city will be developed through international
collaboration. A new scheme will be implemented to improve infrastructure in government colleges and
polytechnics. Girl students, who studied from Class 6 to 12 in government schools, will be provided Rs
1,000 per month till the uninterrupted completion of their undergraduate degree, diploma, and ITI courses.
▪ MSMEs and Industry: A new program will be launched to develop various clusters of micro enterprises.
New industrial parks will be set up in five districts. A special fund of Rs 100 crore will be set up to build
public infrastructure for export. Regional startup hubs will be set up in three districts. Direct government
procurement of innovative manufactured products up to Rs 50 lakh will be permitted to support the startups.
A new Footwear and Leather Industry Development Policy will be released.
▪ Environment and land: Tamil Nadu Green Climate Change fund will be set up to fund climate change
initiatives. A Commission will be set up to recommend policy changes for the protection and augmentation
of forest cover. A comprehensive policy on leasing of government land will be formulated.
▪ Administrative Reforms: The government will constitute a committee to propose a roadmap for reforms in
human resource management in view of high salary and pension burden despite high vacancy.

Tamil Nadu’s Economy Figure 1: Growth in GSDP and sectors in

Tamil Nadu at constant (2011-12) prices
▪ GSDP: Tamil Nadu’s GSDP (at constant prices) registered
10%
6.6%

7.6%

7.0%
6.4%

6.1%
5.8%

5.7%

a growth of 1.4% in 2020-21. In comparison, national

5.4%
4.8%

GDP registered a negative growth of 6.6% in 2020-21.

5%
1.4%
1.1%
0.4%

▪ Sectors: In 2020-21, at current prices, agriculture,

manufacturing, and services sectors contributed to 13%, 0%
33%, and 54% of the economy.
▪ Per capita GSDP: The per capita GSDP of Tamil Nadu in
2020-21 (at current prices) was Rs 2,49,517; 5.4% higher
2018-19 2019-20 2020-21
than the corresponding figure in 2019-20. In comparison,
Note: These numbers are as per constant (2011-12)
per capita GDP at the national level was Rs 1,46,087 in prices, i.e., the growth rate is adjusted for inflation.
2020-21 (at current prices). Sources: MoSPI; PRS.

Saket Surya
[email protected] March 31, 2022
PRS Legislative Research ◼ Institute for Policy Research Studies
3rd Floor, Gandharva Mahavidyalaya ◼ 212, Deen Dayal Upadhyaya Marg ◼ New Delhi – 110002
Tel: (011) 2323 4801, 4343 4035 ◼ www.prsindia.org
 Tamil Nadu Budget Analysis 2022-23 PRS Legislative Research

Budget Estimates for 2022-23

▪ Expenditure (excluding debt repayment) in 2022-23 is targeted at Rs 3,33,251 crore. This is an increase
of 11% over the revised estimate of 2021-22 (Rs 3,00,651 crore). This expenditure is proposed to be met
through receipts (excluding borrowings) of Rs 2,36,638 crore and net borrowings of Rs 93,851 crore.
Receipts (excluding borrowings) for 2022-23 are expected to register an increase of 13% over the revised
estimate of 2021-22. In 2021-22, receipts are estimated to be 1% higher than the budget estimates.
▪ In 2022-23, the state is estimated to observe a revenue deficit of Rs 52,781 crore, which is 2.12% of its
GSDP. In comparison, in 2020-21, the state observed a revenue deficit of 3.28% of GSDP (Rs 62,326
crore). In 2021-22, the state is estimated to observe a revenue deficit of 2.54% of GSDP (Rs 55,273 crore),
lower than the budget estimate of 2.75% of GSDP.
▪ Fiscal deficit in 2022-23 is estimated to be 3.63% of GSDP which is within the limit of 4% of GSDP
permitted by the central government as per the Union Budget 2022-23 (of which, 0.5% of GSDP will be
made available upon undertaking power sector reforms). In 2021-22, the state has estimated a fiscal deficit
of 3.80% of GSDP, within the limit of 4.5% of GSDP permitted by the central government (of which, 0.5%
of GSDP becomes available upon undertaking power sector reforms). As per the revised estimates, fiscal
deficit in 2021-22 is expected to be lower than the budget estimate of 4.33% of GSDP.
Table 1: Budget 2022-23 - Key figures (in Rs crore)
% change from % change
2020-21 2021-22 2021-22 2022-23
Items BE 21-22 to RE from RE 21-22
Actuals BE RE BE
21-22 to BE 22-23
Total Expenditure 2,89,533 3,29,035 3,20,376 -3% 3,60,379 12%
(-) Repayment of debt 16,229 19,857 19,724 -1% 27,128 38%
Net Expenditure (E) 2,73,305 3,09,177 3,00,651 -3% 3,33,251 11%
Total Receipts 2,82,189 3,26,803 3,18,000 -3% 3,57,617 12%
(-) Borrowings* 1,02,867 1,18,250 1,08,175 -9% 1,20,979 12%
Net Receipts (R) 1,79,322 2,08,553 2,09,824 1% 2,36,638 13%
Fiscal Deficit (E-R)* 87,742 92,529 82,732 -11% 90,114 9%
as % of GSDP 4.61% 4.33% 3.80% 3.63%
Revenue Deficit 62,326 58,693 55,273 -6% 52,781 -5%
as % of GSDP 3.28% 2.75% 2.54% 2.12%
Primary Deficit 51,245 50,926 41,272 -19% 43,387 5%
as % of GSDP 2.69% 2.38% 1.89% 1.75%
Note: *Borrowings include receipts of back-to-back loan in lieu of GST compensation of: (i) Rs 6,241 crore in 2020-21, (ii) Rs 8,095 crore
in 2021-22 (same at budget and revised stage), and (iii) Rs 6,500 crore in 2022-23. As per the medium term fiscal plan statement of Tamil
Nadu government, this loan is to be serviced out of the GST compensation cess fund of the central government, and does not form part of
the fiscal deficit and debt to GSDP ratio of the state. Fiscal deficit and primary deficit have been reported after discounting for this loan.
Sources: Tamil Nadu Budget Documents 2022-23; PRS.

Expenditure in 2022-23
▪ Revenue expenditure in 2022-23 is estimated to be Rs 2,84,188 Funding of losses of TANGEDCO
crore, which is an increase of 10% over the revised estimate for
TANGEDCO is a state-owned power generation
2021-22 (Rs 2,59,151 crore). This expenditure includes the
and distribution company. Under the UDAY
payment of salaries, pensions, interest, and subsidies. In 2021-22, scheme, the state government is required to
as per the revised estimates, revenue expenditure is expected to be progressively take over losses incurred by
1% lower than the budget estimate. TANGEDCO. The state provides equivalent
grants in the next financial year. 100% of losses
▪ Capital outlay in 2022-23 is estimated to be Rs 43,043 crore,
incurred in 2021-22 are required to be funded by
which is an increase of 13% over the revised estimate of 2021-22. the state government. The state government has
Capital outlay comprises expenditure towards the creation of allocated following amounts for funding losses of
assets. This includes expenditure on building schools, hospitals, TANGEDCO: (i) Rs 8,373 crore in 2020-21, (ii)
and roads and bridges. In 2021-22, capital outlay is estimated to Rs 7,108 crore in 2021-22 (revised estimate), (iii)
be 10% lower than the budget estimate. Rs 13,108 crore in 2022-23 (budget estimate).

Table 2: Expenditure Budget 2022-23 (in Rs crore)

% change from % change from
2020-21 2021-22 2021-22 2022-23
Items BE 21-22 to RE RE 21-22 to BE
Actuals BE RE BE
21-22 22-23
Revenue Expenditure 2,36,402 2,61,189 2,59,151 -1% 2,84,188 10%
Capital Outlay 33,068 42,181 37,936 -10% 43,043 13%
Loans given by the state 3,835 5,808 3,564 -39% 6,020 69%
Net Expenditure 2,73,305 3,09,177 3,00,651 -3% 3,33,251 11%
Sources: Tamil Nadu Budget Documents 2022-23; PRS.
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Tamil Nadu Budget Analysis 2022-23 PRS Legislative Research

Committed expenditure: Committed expenditure of a state typically includes expenditure on payment of

salaries, pensions, and interest. Allocation of a large portion of the budget for committed expenditure items
limits the state’s flexibility to decide on other expenditure priorities such as developmental schemes and capital
outlay. In 2022-23, Tamil Nadu is estimated to spend Rs 1,57,802 crore on committed expenditure items, which
is 68% of its revenue receipts. This comprises spending on salaries (31% of revenue receipts), pension (17%),
and interest payments (20%). Committed expenditure in 2022-23 is estimated to increase by 21% over the
revised estimate of 2021-22. Interest payments are estimated to increase by 13% whereas salaries and pension
are estimated to increase by 14% and 50%, respectively.
A high increase in pension in 2022-23 is mainly on account of an estimated increase of: (i) Rs 4,697 crore in
expense towards superannuation and retirement allowances, (ii) Rs 1,866 crore towards leave encashment
benefits, (ii) Rs 1,854 crore towards pension to employees of state-aided educational institutes, (iv) Rs 1,840
crore towards the commuted value of pensions, and (v) Rs 1,668 crore towards gratuities.
Table 3: Committed Expenditure in 2022-23 (in Rs crore)
% change % change
2020-21 2021-22 2021-22 2022-23
Items from BE 21-22 from RE 21-22
Actuals BE RE BE
to RE 21-22 to BE 22-23
Salaries 57,373 63,919 62,873 -2% 71,567 14%
Pensions 27,115 28,251 26,410 -7% 39,508 50%
Interest Payment 36,497 41,603 41,461 0% 46,727 13%
Total Committed Expenditure 1,20,985 1,33,773 1,30,743 -2% 1,57,802 21%
as % of Revenue Receipts 70% 66% 64% 68%
Note: Figures for salaries also include certain grants in aid for education.
Sources: Tamil Nadu Budget Documents 2022-23; PRS.

Sector-wise expenditure: The sectors listed below account for 53% of the total expenditure on sectors by the
state in 2022-23. A comparison of Tamil Nadu’s expenditure on the key sectors with that by other states is
shown in Annexure 1.
Table 4: Sector-wise expenditure under Tamil Nadu Budget 2022-23 (in Rs crore)
% change from
2020-21 2021-22 2021-22 2022-23 Budget Provisions
Sectors RE 21-22 to
Actuals BE RE BE 2022-23 BE
BE 22-23
▪ Government secondary schools and primary schools
Education, Sports,
38,578 40,208 38,775 43,799 13% have been allocated Rs 12,427 crore and Rs 11,246
Arts, and Culture
crore, respectively.

Agriculture and allied

▪ Rs 1,760 crore has been allocated towards crop
15,455 23,398 21,833 21,363 -2% insurance. Rs 487 crore has been allocated towards
activities
agricultural research and education.

Transport 15,116 18,156 15,842 20,059 27%

▪ Rs 16,311 crore has been allocated towards capital
outlay on roads and bridges.
Health and Family ▪ Rs 1,576 crore has been allocated towards the
17,394 18,632 20,080 17,733 -12%
Welfare primary health centre.

Energy 16,577 16,020 15,626 17,433 12%

▪ Rs 13,108 crore has been allocated towards funding
losses of TANGEDCO as per the UDAY scheme.
Social Welfare and ▪ Rs 3,350 crore has been allocated towards pension
24,520 24,527 25,448 16,674 -34%
Nutrition under social security schemes.

Urban Development 5,702 8,803 9,455 10,396 10%

▪ Rs 1,875 crore has been allocated towards the
implementation of the SMART cities mission.

Police 7,710 8,601 8,493 9,857 16% ▪ District police has been allocated Rs 5,458 crore.

▪ Rs 2,800 crore has been allocated towards

Rural Development 5,122 8,965 8,876 9,562 8% MGNREGS. Rs 440 crore has been allocated towards
road/bridge works under PMGSY-III.

Housing 5,382 5,719 5,530 7,218 31% ▪ Rural housing has been allocated Rs 2,527 crore.
% of total
expenditure 56% 57% 57% 53%
on all sectors
Sources: Tamil Nadu Budget Documents 2022-23; PRS.

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Tamil Nadu Budget Analysis 2022-23 PRS Legislative Research

Receipts in 2022-23
▪ Total revenue receipts for 2022-23 are estimated to be Rs 2,31,407 crore, an increase of 14% over the
revised estimate of 2021-22. Of this, Rs 1,58,337 crore (68%) will be raised by the state through its own
resources, and Rs 73,070 crore (32%) will come from the centre. Resources from the centre will be in the
form of state’s share in central taxes (14.4% of revenue receipts) and grants (17.2% of revenue receipts).
▪ Devolution: In 2022-23, the state estimates to receive Rs 33,311 crore in the form of share in central taxes,
a decrease of 1% over the revised estimates of 2021-22. In 2021-22, as per the revised estimate, receipts
from the share in central taxes are expected to be 24% higher than the budget estimate.
▪ State’s own tax revenue: Total own tax revenue of Tamil Nadu is estimated to be Rs 1,42,800 crore in
2022-23, an increase of 17% over the revised estimate of 2021-22. Tamil Nadu’s own tax revenue as a
percentage of GSDP is estimated to rise from 5.6% of GSDP in 2020-21 (as per actuals) to 5.7% of GSDP
in 2022-23 (as per budget estimate).
▪ State’s non-tax revenue: In 2022-23, the state is estimated to earn Rs 15,537 crore in the form of the
state’s own non-tax revenue, an increase of 31% over the revised estimates of 2021-22. A high increase in
non-tax revenue in 2022-23 is mainly on account of an estimated increase of: (i) Rs 1,612 crore in interest
receipts, and (ii) Rs 1,008 crore in receipts from non-ferrous mining and metallurgical industries. In 2021-
22, the state’s own non-tax revenue is estimated to be 16% lower than the budget estimate.
Table 5: Break-up of the state government’s receipts (in Rs crore)
% change % change
2020-21 2021-22 2021-22 2022-23
Sources from BE 21-22 from RE 21-22
Actuals BE RE BE
to RE 21-22 to BE 22-23
State's Own Tax 1,06,153 1,26,644 1,21,858 -4% 1,42,800 17%
State's Own Non-Tax 10,422 14,139 11,831 -16% 15,537 31%
Share in Central Taxes 24,925 27,148 33,580 24% 33,311 -1%
Grants-in-aid from Centre 32,577 34,564 36,609 6% 39,759 9%
Revenue Receipts 1,74,076 2,02,496 2,03,878 1% 2,31,407 14%
Non-debt Capital Receipts 5,245 6,057 5,946 -2% 5,230 -12%
Net Receipts 1,79,322 2,08,553 2,09,824 1% 2,36,638 13%
Note: BE is Budget Estimates; RE is Revised Estimates.
Sources: Tamil Nadu Budget Documents 2022-23; PRS.

▪ In 2022-23, Sales Tax/VAT is estimated to

GST Compensation ends in June 2022
be the largest source of own tax revenue
When the GST was introduced, the central government guaranteed
(40% of own tax revenue). Sales
states a 14% compounded annual growth in their GST revenue for a
Tax/VAT revenue in 2022-23 is estimated period of five years. Any shortfall in a state’s GST revenue from this
at Rs 57,203 crore, an increase of 17% level is covered by the Centre by providing compensation grants to the
over the revised estimates of 2021-22. state. This guarantee ends in June 2022. During 2017-22, Tamil
Nadu has relied on GST compensation grants to achieve the
▪ SGST is estimated to be the second largest
guaranteed SGST revenue level. In 2021-22, Tamil Nadu is estimated
source of own tax revenue (35%). In to receive Rs 15,050 crore in the form of GST compensation grants,
2022-23, SGST revenue is estimated at Rs which is about 12.4% of its own tax revenue. Hence, beyond June
49,565 crore, an increase of 15% over the 2022, Tamil Nadu might see a decline in the level of revenue receipts.
revised estimates of 2021-22. State excise As per the budget speech, a revenue loss of Rs 20,000 crore is
duty in 2022-23 is estimated to increase by expected as a result of discontinuation of GST compensation grants in
30% over the revised estimates of 2021-22 2022-23. Note that although there is no public confirmation on
whereas revenue from taxes on vehicles is continuation of back-to-back GST compensation loan in 2022-23, the
estimated to increase by 27%. state has estimated a receipt of Rs 6,500 crore on this account.

Table 6: Major sources of state’s own-tax revenue (in Rs crore)

% change from % change
2020-21 2021-22 2021-22 2022-23
Taxes BE 21-22 to RE from RE 21-22
Actuals BE RE BE
21-22 to BE 22-23
Sales Tax/ VAT 43,489 53,798 48,822 -9% 57,203 17%
State GST 37,942 42,300 43,023 2% 49,565 15%
Stamps Duty and Registration Fees 11,675 13,253 14,325 8% 16,323 14%
State Excise 7,822 8,770 8,167 -7% 10,589 30%
Taxes on Vehicles 4,561 6,582 5,635 -14% 7,149 27%
Taxes and Duties on Electricity 482 1,355 1,579 17% 1,633 3%
Land Revenue 211 560 297 -47% 326 10%
GST Compensation Grants 10,603 7,705 6,955 -10% 11,972 72%
GST Compensation Loans 6,241 8,095 8,095 0% 6,500 -20%
Note: GST compensation loan number has been calculated based on reported fiscal deficit under medium term fiscal plan statement. It has
also been corroborated with numbers given in the Budget speech and press releases of the GST Council and the Union Ministry of Finance.
Sources: Tamil Nadu Budget Documents 2022-23; PRS.
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Tamil Nadu Budget Analysis 2022-23 PRS Legislative Research

Deficits and Debt Targets for 2022-23

The Tamil Nadu Fiscal Responsibility Act, 2003 (FRA Act) provides annual targets to progressively reduce the
outstanding liabilities, revenue deficit, and fiscal deficit of the state government.
Revenue Deficit: It is the difference of revenue expenditure and revenue receipts. A revenue deficit implies that
the government needs to borrow to finance its expenses which do not increase its assets or reduce its liabilities. As
per the amendment in 2016, the FRA Act had set the target of eliminating revenue deficit by the end of 2019-20 and
maintaining a revenue surplus thereafter. The state observed a revenue deficit of 1.95% of GSDP in 2019-20. In
2020-21 (COVID year), revenue deficit increased to 3.28% of GSDP (Rs 62,326 crore). The FRA Act was further
amended in 2021 to set the target of eliminating revenue deficit by 2023-24. In 2022-23, the state is estimated to
observe a revenue deficit of 2.12% of its GSDP, lower than revenue deficit of 2.54% of GSDP in 2021-22 (as per
the revised estimates). As per the medium term fiscal plan, the revenue deficit is expected to reduce to 0.42% of
GSDP in 2024-25.
Fiscal deficit: It is the excess of total expenditure over total
receipts. This gap is filled by borrowings by the government CAG observations on Definition of Outstanding Debt
and leads to an increase in total liabilities of the state In its Report No 4 of 2021, CAG observed that the
government. In 2022-23, the fiscal deficit is estimated to be broader definition of the total outstanding debt/liabilities
3.63% of GSDP. It is within the limit of 4% of GSDP should include: (i) liabilities upon consolidated fund
permitted by the central government in 2022-23 (of which, (market borrowings, loans from central government), (ii)
0.5% of GSDP will be made available upon undertaking power liabilities on public account (small savings, provident
funds, reserve funds, and deposits), and (iii) borrowings
sector reforms). In 2021-22, fiscal deficit is estimated to be
by state PSUs and special purpose vehicles (SPVs)
3.80% of GSDP, lower than the budget estimate of 4.33% of where principal or interest are to be serviced out of state
GSDP. Fiscal deficit in 2021-22 is within the limit of 4.5% of budgets (termed as off budget borrowings). However,
GSDP permitted by the central government (of which, 0.5% of the definition of “Outstanding Debt” under the Tamil Nadu
GSDP becomes available upon undertaking power sector Fiscal Responsibility Act, 2003 does not include such
reforms). As per the 2021 amendment, the FRA Act has set a borrowings by state PSUs and SPVs. CAG observed
target of reducing fiscal deficit to 3% of GSDP by 2023-24. As that as these borrowings are not depicted in finance
per the medium term fiscal plan statement, fiscal deficit is accounts, there is a lack of transparency regarding the
estimated to reduce to 3.17% of GSDP in 2023-24 and 2.91% outstanding liabilities of the state. As per CAG, at the
end of March 2020, the total outstanding off-budget
of GSDP in 2024-25.
borrowing was Rs 704 crore (about 0.03% of GSDP).
Outstanding debt: Outstanding debt is the accumulation of
total borrowings at the end of a financial year, it also includes certain liabilities on the public account. As per
the Budget Speech, outstanding debt of Tamil Nadu at the end of March 2023 is estimated to be 26.29% of
GSDP. Outstanding debt is estimated to decline to 25.93% of GSDP at the end of March 2025 (Figure 3). As
per the FRA Act, outstanding debt was to be maintained below 25.2% of GSDP by the end of 2014-15, and be
maintained thereafter at such percentage, as may be prescribed.
Figure 2: Revenue and Fiscal Balance (% of GSDP) Figure 3: Outstanding debt (% of GSDP)
0% 25.84% 26.29% 26.24% 25.93%
-0.42%
30% 22.96% 25.24%
-0.93%
20%
-3% -1.95% -2.12%
-2.54% -2.91%
-3.26% -3.28% -3.17% 10%
-3.80% -3.63%
-4.61%
-6% 0%
2019-20 2020-21 2021-22 2022-23 2023-24* 2024-25*
RE BE
Revenue Balance Fiscal Balance
Note: RE is Revised Estimates; BE is budget estimates. Positive sign
indicates a surplus, negative sign indicates a deficit. *Figures for 2023- Note: BE is budget estimates. *Figures for 2023-24 and
24 and 2024-25 are projections. 2024-25 are projections. Number for 2019-20 is as per CAG
Sources: Medium Term Fiscal Plan, Tamil Nadu Budget Documents report.
2022-23; PRS. Sources: Tamil Nadu Budget Documents 2022-23; CAG;
PRS.
Outstanding Government Guarantees: Outstanding liabilities of states do not include a few other liabilities
that are contingent in nature, which states may have to honour in certain cases. State governments guarantee the
borrowings of State Public Sector Enterprises (SPSEs) from financial institutions. As per the Budget Speech, at
the end of 2020-21, outstanding government guarantees were 2.79% of GSDP or 31.08% of revenue receipts of
the preceding year. The FRA Act specifies that the outstanding guarantee should be lower than: (i) 10% of
GSDP, or (ii) 100% of the revenue receipts of the preceding year, whichever is lower. Outstanding government
guarantee at the end of 2020-21 was lower than these limits.
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March 31, 2022 -5-
Tamil Nadu Budget Analysis 2022-23 PRS Legislative Research

Annexure 1: Comparison of states’ expenditure on key sectors

The graphs below compare Tamil Nadu’s expenditure on six key sectors as a proportion of its total expenditure
on all sectors. The average for a sector indicates the average expenditure in that sector by 30 states (including
Tamil Nadu) as per their budget estimates of 2021-22.1
▪ Education: Tamil Nadu has allocated 13.4% of its total expenditure for education in 2022-23. This is
lower than the average allocation (15.2%) for education by all states (as per 2021-22 Budget Estimates).
▪ Health: Tamil Nadu has allocated 5.4% of its total expenditure on health, which is lower than the average
allocation for health by states (6%).
▪ Agriculture: The state has allocated 6.5% of its total expenditure towards agriculture and allied activities.
This is higher than the average allocation for agriculture by states (6.2%).
▪ Rural development: Tamil Nadu has allocated 2.9% of its expenditure towards rural development. This is
lower than the average allocation for rural development by states (5.7%).
▪ Police: Tamil Nadu has allocated 3% of its total expenditure on police, which is lower than the average
expenditure on police by states (4.3%).
▪ Roads and bridges: Tamil Nadu has allocated 5.4% of its total expenditure on roads and bridges, which is
higher than the average allocation by states (4.7%).

Spending on education as a Spending on health as a % of Spending on agriculture as

% of total expenditure total expenditure a % of total expenditure

20% 8% 6.5% 6.1% 6.8% 10% 7.7% 7.3%

14.3% 13.3% 13.1% 13.4% 15.2% 5.4% 6.0% 8% 6.5% 6.2%
15% 6% 5.7%
6%
10% 4% 4%
5% 2% 2%
0%
0% 0%

2020-21

2021-22 (RE)

2022-23 (BE)
Average of all states
2021-22 (BE)
2020-21

2021-22 (RE)
2021-22 (BE)

2022-23 (BE)

Average of all states

2020-21

2021-22 (RE)
2021-22 (BE)

2022-23 (BE)
Average of all states

(2021-22 BE)
(2021-22 BE)
(2021-22 BE)

Spending on rural Spending on police as a % of Spending on roads and

development as a % of total total expenditure bridges as a % of total
expenditure expenditure
6%
5.7% 4.3%
6% 5.2% 5.0% 5.4%
4% 6% 4.6% 4.7%
4% 3.0% 3.0% 2.9% 2.9% 2.8% 2.9% 3.0%
1.9% 4%
2% 2%
0% 2%
0%
2020-21

2021-22 (RE)
2021-22 (BE)

2022-23 (BE)
Average of all states

0%
2020-21

2021-22 (RE)
2021-22 (BE)

2022-23 (BE)

states (2021-22 BE)

(2021-22 BE)

2020-21

2021-22 (RE)
2021-22 (BE)

2022-23 (BE)
Average of all states
Average of all

(2021-22 BE)

Note: 2020-21, 2021-22 (BE), 2021-22 (RE), and 2022-23 (BE) figures are for Tamil Nadu.
Sources: Tamil Nadu Budget Documents 2022-23; various state budgets; PRS.

1
The 30 states include the Union Territory of Delhi and Union Territory of Jammu and Kashmir.

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Tamil Nadu Budget Analysis 2022-23 PRS Legislative Research

Annexure 2: Comparison of 2020-21 Budget Estimates and Actuals

The following tables compare the actuals of 2020-21 with budget estimates for that year.
Table 7: Overview of Receipts and Expenditure (in Rs crore)
Particular 2020-21 BE 2020-21 Actuals % change from BE to Actuals
Net Receipts (1+2) 2,24,739 1,79,322 -20%
1. Revenue Receipts (a+b+c+d) 2,19,375 1,74,076 -21%
a. Own Tax Revenue 1,33,530 1,06,153 -21%
b. Own Non-Tax Revenue 15,899 10,422 -34%
c. Share in central taxes 32,849 24,925 -24%
d. Grants-in-aid from the Centre 37,097 32,577 -12%
Of which GST compensation grants 10,300 10,603 3%
2. Non-Debt Capital Receipts 5,364 5,245 -2%
3. Borrowings 74,107 1,02,867 39%
Of which GST compensation loan 0 6,241 -
Net Expenditure (4+5+6) 2,84,086 2,73,305 -4%
4. Revenue Expenditure 2,40,993 2,36,402 -2%
5. Capital Outlay 36,368 33,068 -9%
6. Loans and Advances 6,725 3,835 -43%
7. Debt Repayment 16,304 16,229 0%
Revenue Deficit 21,618 62,326 188%
Revenue Deficit (as % of GSDP) 1.03% 3.28%
Fiscal Deficit 59,346 87,742 48%
Fiscal Deficit (as % of GSDP) 2.84% 4.61%
Note: BE: Budget Estimates.
Source: Tamil Nadu Budget Documents of various years; PRS.

Table 8: Key Components of State's Own Tax Revenue (in Rs crore)

Sector 2020-21 BE 2020-21 Actuals % change from BE to Actuals
Taxes and Duties on Electricity 1,480 482 -67%
Land Revenue 328 211 -36%
Taxes on Vehicles 6,898 4,561 -34%
Sales Tax/VAT 56,046 43,489 -22%
Stamps Duty and Registration Fees 14,435 11,675 -19%
SGST 46,196 37,942 -18%
State Excise Duty 8,134 7,822 -4%
Source: Tamil Nadu Budget Documents of various years; PRS.

Table 9: Allocation towards Key Sectors (in Rs crore)

Sector 2020-21 BE 2020-21 Actuals % change from BE to Actuals
Rural Development 8,004 5,122 -36%
Urban Development 7,869 5,702 -28%
Welfare of SC, ST, OBC, and Minorities 5,204 4,574 -12%
Police 8,517 7,710 -9%
Agriculture and allied activities 16,986 15,455 -9%
Education, Sports, Arts, and Culture 41,627 38,578 -7%
Housing 5,649 5,382 -5%
Irrigation and Flood Control 6,342 6,318 0%
Transport 14,745 15,116 3%
of which Roads and Bridges 14,223 13,986 -2%
Water Supply and Sanitation 3,112 3,410 10%
Health and Family Welfare 15,773 17,394 10%
Energy 13118 16,577 26%
Social Welfare and Nutrition 14,071 24,520 74%
Source: Tamil Nadu Budget Documents of various years; PRS.

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