Hindu Religious and Charitable Endowments

153. The landmark Government order of allowing qualified Hindus belonging to all communities to be Archakas in temples, thereby upholding the principle of equality and thus removing the thorn in the heart of Thanthai Periyar and realising his dream was issued by this Government. With a view to implementing this, Saiva Archaka training centres in four places and Vaishnava Archaka training centres in two places have been started and 207 students are undergoing training to become Archakas. This includes 76 students belonging to Backward Classes, 55 students from the Most Backward Classes, 34 Adi Dravidar students and 42 students from other communities.

154. After this Government assumed charge, renovation works have been carried out in 1,685 temples in the state at a cost of Rs.37 crores. Kudamuzhukku has also been performed in these temples. As never before, during 2007-2008 alone, sanction has been accorded for carrying out renovation works in 308 temples at a cost of Rs.45 crores. As stated in the 2007-2008 Budget Speech, under the scheme for renovating ancient temples of historical importance without impairing their antiquity, 48 temples are being renovated at an estimated cost of Rs.10 crores. Under the scheme for renovating ancient temples renowned for their reference in the ‘Thevara Thiruvasakams’ of Nayanmars and ‘Divyaprabandhams’ of Alwars, the Government has sanctioned the renovation of 30 temples at a cost of Rs.3.29 crores. These works will be taken up soon.

Sports and Youth Welfare

155. With a view to improving the health and fitness of the youth in the State, a gymnasium will be established in each Assembly Constituency. The building for this will be constructed from the MLAs Constituency Development Fund and the equipments will be provided by the Government. A sum of Rs.2.34 crores is allocated for this scheme in this Budget. In addition, in order to provide residential coaching facilities to sportspersons from poor families, a new sports hostel will be established.

Welfare of Government Employees and Teachers

156. Government employees, by dutifully discharging their responsibility of taking government welfare schemes to the people, act as a bridge between the two. This Government has restored the benefits which were withdrawn by the previous Government. All vacant posts are being filled in the time scale of pay. The Government has also reduced the minimum service for full pension to 30 years and has also ordered that pension will be calculated on the basis of 50% of the last drawn pay or 50% of the average pay drawn in the last ten months of service, whichever is higher. In addition to this, bonus and special ad-hoc bonus have also been restored at a cost of Rs.250 crores.

157. The Hon’ble Chief Minister had announced that this Government will implement a new health insurance scheme which will benefit not only government employees but also employees of Public Sector Undertakings, Statutory Corporations, Local Bodies and Universities. This scheme will fully cover medical expenses up to Rs.Two lakhs in a block of four years, incurred by the employee or his family. Under this scheme, medical treatment for an increased number of diseases can be availed under a cashless system, free of cost, by using the identity cards issued for this purpose. The Government will incur an additional expenditure of Rs.26 crores on account of this scheme. The service provider has been selected and this scheme will be implemented effectively from the coming financial year.

158. In addition, having considered the various demands from government employees, teachers and pensioners and with a view to further motivating them, the following benefits will be granted:

- The Government of India has increased the rate of Dearness Allowance payable to its employees, pensioners and family pensioners from 41% to 47% with effect from 1st January 2008. Taking note of this, this Government has also decided to raise the Dearness Allowance payable to State government employees, teachers, pensioners and family pensioners by 6% and the increased Dearness Allowance at 47% will be payable from 1.1.2008. The arrears of the increased Dearness Allowance will be paid in cash. The Government will incur an estimated additional expenditure of Rs.136 crores during the current financial year and Rs.817 crores during the coming financial year on account of this.

- The Government has permitted pensioners to claim reimbursement for eligible medical treatment availed in any hospital. Consequently, the number of reimbursement claims from the pensioners have increased enormously with the result that the subscription amount collected from the pensioners is inadequate to meet the requirement. The Government, with a view to eliminating delay in sanctioning the reimbursement claims of the pensioners, has decided to sanction Rs.10 crores as a lumpsum grant so as to settle all the pending claims till February 2008.

- In the context of the increased medical expenditure, several pensioners’ associations have represented that the upper ceiling of Rs.50,000 fixed for claiming medical reimbursement is very low. With a view to providing adequate reimbursement of the medical expenses incurred by pensioners in their old age, the Government has decided to enhance the existing ceiling from 75% of medical cost or Rs.50,000 to 75% of medical cost or Rs.one lakh by making a monthly deduction of Rs.50.

159. It is expected that the Sixth Pay Commission, constituted by the Union Government, will submit its report this month. Once the Union Government issues orders on the recommendations of the Pay Commission, this Government will examine the order and take expeditious action to issue necessary orders in respect of State Government employees.

Annual Plan

160. The State’s outlay for the Eleventh Five Year Plan has been approved for Rs.85,344 crores. During the Eleventh Plan period, various programmes of the Government will be implemented with the objective of ensuring social justice besides reviving the farm sector. The Annual Plan for 2008-2009 will be implemented with an outlay of Rs.16,000 crores. Adequate financial allocation has been made in this Budget for the same.

Commercial Taxes

161. Having regard to the requests made by the representatives of the trading and manufacturing community in the pre-budget meeting conducted by the Government on 26.2.2008 as is the custom when the DMK Government is in charge and keeping in mind the interest of consumers, traders and manufacturers, the following tax concessions are being announced in respect of VAT.

- At present, Thali made of gold not exceeding 8 grams in weight is exempt from levy of tax. This condition of restriction on weight will be removed and this exemption will be extended to similar items symbolic of wedlock such as Karukamani used by Muslims and the Cross used by Christians.

- Bread is already exempt from levy of tax. Bun and Rusk mostly taken as food by the common man will also be exempt from levy of tax.

- Cloth-lined paper envelope will also be exempt from levy of tax, as paper envelope is already exempt.

- Siddha medicinal system is practised in Tamil Nadu as a traditional system of medicine. Most of the inputs used in the preparation of Siddha medicine are already exempt. Therefore, to encourage the indigenous Siddha medicinal system, all Siddha medicine will be exempt from levy of tax.

- Most of the vegetable oils and refined oils are exempt from levy of tax subject to a turnover condition. Soya oil will also be included in the list and exemption will be granted with the same condition.

- Local sales of turmeric, chilly and coriander are exempt from levy of tax subject to a turnover condition. The conditional exemption will be extended to turmeric powder, chilly powder and coriander powder also.

- Coconut is already exempt from levy of tax. Desiccated coconut, coconut milk and coconut milk powder which are manufactured from coconut will also be granted exemption.

- Tender coconut is exempt from levy of tax. Exemption will also be granted to packaged tender coconut water for the benefit of coconut farmers and to meet the competition from artificial soft drinks.

- Taking into consideration the interests of the sugarcane farmers, general exemption will be granted to jaggery so as to avail exemption on inter-state sales also.

- As announced in the Industrial Policy of the Government, jatropha seeds and jatropha oil will be exempt from levy of tax to encourage the use of bio-fuels.

- Rubberised textile fabrics will be exempt from levy of tax.

- Arecanut and roasted seeval are liable to tax at 4% now. Similarly 4% tax will be levied on raw seeval by reducing from 12.5%.

- Ores and minerals are liable to tax at 4%. Mosaic chips produced from the above will also be liable to tax at 4%.

- Tax on files and folders made of paper board will be reduced from 12.5% to 4%.

- Plastic photo frames will be treated as plastic goods and levied tax at 4%.

- Tax on resale of used vehicles which were purchased after paying tax either under General Sales Tax or Value Added Tax and registered within the State of Tamil Nadu under the Motor Vehicles Act will be reduced from 12.5% to 4% without the eligibility for availing input tax credit of the tax paid on the purchase of such vehicles.

- Tax on leasing rentals on the lease of equipments used for construction purposes will be reduced from 12.5% to 4%, without the eligibility of input tax credit.

- Tax on generators used for producing electricity will be reduced to 4%.

- Sale of unbranded food and drinks by other than star hotels is liable to tax at 2%. At the same time, they are not entitled to avail input tax credit on the goods purchased by them. These hotels supply branded soft drinks and ice creams also. In such circumstances, tax at 12.5% is paid on purchase of such branded items and when the same items are sold again, another levy of tax at 12.5% is made, without allowing input tax credit. To remove this anomaly, tax at 2% will be levied on the sale of such branded items also, with the same condition of ineligibility of availing input tax credit. When these hotels purchase goods such as vegetable oil, pulses and grams, turmeric, chilly and coriander, which are conditionally exempt from tax, such purchase is attracted by levy of purchase tax under section 12 of Tamil Nadu Value Added Tax Act, 2006. To remove this difficulty, tax on the purchase of these goods by the hoteliers will be exempt.

- Necessary amendments will be brought in to the provisions of Tamil Nadu Value Added Tax Act, 2006 and its rules in order to further simplify and fine tune the procedures. The details of such amendments will be announced when the Demand for Grant of the Commercial Taxes Department is taken up.

- Value Added Tax was introduced from 1.1.2007. There are arrears of tax levied under Tamil Nadu General Sales Tax Act. To enable the dealers to settle such arrears up to the year 2001-2002, a ‘One Time Settlement Scheme’ will be announced in the coming financial year. The details of the scheme will be announced when the Demand for Grant of the Commercial Taxes Department is taken up.

- The announcement of tax exemptions and reductions made now, will take effect from 1.4.2008.

Overall Financial Position

162. Hon’ble Speaker Sir, I will now present the details on the fiscal projections for the Budget Estimates for the year 2008-2009. The total revenue receipts of the Government for 2008-2009 is estimated at Rs.51,505.62 crores and the total revenue expenditure is estimated at Rs.51,421.57 crores.

163. The total capital expenditure of the Government, including loans and advances (net) in 2008-2009 is projected at Rs.9,876.35 crores. This will result in a total fiscal deficit of Rs.9,792.30 crores. The Hon’ble Members may note that as per the Fiscal Responsibility Act, 2003, fiscal deficit should not exceed 3% of the Gross State Domestic Product and thus the projected fiscal deficit is well within this limit. Taking into account the net Public Account, the overall deficit will be Rs.2.19 crores. This deficit will be made good by economy in expenditure and better tax administration.

164. A plan of action for future has been indicated in the Medium Term Fiscal Plan given as annexure to the Budget Speech. I request that this may be taken as read as part of the Budget Speech. This Government will effectively adhere to the fiscal targets indicated in the Medium Term Fiscal Plan.

165. The hallmark of a good Government is that it will be totally non-partisan and will work for all sections of the society without any consideration as to whether one belongs to the ruling or opposition party, allied or no party. We are functioning with the noble objective of providing such good governance.

166. In our endeavour towards prosperity and development in Tamil Nadu, we have to struggle very hard to overcome the obstacles in our path towards solutions. To quote a few - the issues like Cauvery dispute with Karnataka, which has historically been a friend and contributor to our prosperity – Palar - Mullai Periyar have been persisting. It has come to such a situation that even our rightful drinking water is being denied ! The rhetoric of ‘One India - One Nation - One Country - One people from the Himalayas to Kanyakumari’ has been shining only on paper; while the unity, integrity and sovereignty of our country have become question marks and the needs and pleas of our State have become objects of ridicule. In this situation, while urging the Union Government to protect our rights and not to turn a blind eye and desist from coming forward to assist our steady and sustainable growth, which we seek to achieve by implementing various schemes with lot of difficulties and overcoming various obstacles; we will march together to enhance the prosperity and strength of our State.

Tamil New Year

167. In view of the consensus amongst almost all Tamil scholars that the first day of the month of Thai, the opening month of the Thiruvalluvar year, is the first day of the Tamil year, this Government has declared 1st Thai as the Tamil New Year day and a legislation to this effect was enacted on 1.2.2008. Therefore, the people of Tamil Nadu who now celebrate Pongal as the festival of Tamils, can now celebrate it as the Tamil New Year day also with redoubled joy. On this day let the people of this State plant trees bearing the ‘Mukkani’ fruits of banana, mango and jack fruit; draw colourful kolams; decorate their houses with array of lamps showing them in new splendour; tiny tots, students and women rejoice by wearing new clothes and singing and dancing in praise of Tamil pride and self respect; and spread the message of equality, hailing it as the Tamil New Year day. Let these celebrations showering love and joy be etched in their memory forever! On behalf of the Government of Tamil Nadu, may I request all Tamil people wherever they live to celebrate the Tamil New Year in a grand manner. The Hon’ble Chief Minister Kalaignar has expressed his wish that this day must be celebrated in all cities, towns, villages and hamlets with programmes depicting our traditional art forms and portraying the greatness of our culture and the richness of our heritage, organized by people themselves according to their means on the lines of the immensely popular Chennai Sangamam held for the last two years.

Birth Centenary of Perarignar Anna

168. The year 2009 is the centenary year of Perarignar Anna, who made us all what we are today and who continues to be our soul, breath and heart beat. We consider the opportunity to celebrate this great leader’s centenary in a year when we are the ruling party, as a great privilege bestowed upon us. Without political differences, we will celebrate Anna’s centenary for the entire year throughout the State in such a grand manner that will be the envy of the entire world. The greatness of Anna will be proclaimed to the world.

169. Though Anna could be at the helm of government only for two years, he has the distinction of having governed in a manner that demonstrated the majesty of democracy to the entire world. It was in those two years that Anna changed the name of the State as Tamil Nadu. It was also during this two year period that Anna, troubled at the prospect of Tamil being destroyed by the domination of other languages, announced that the only Tamil and English would be used in the State. Driven by the ideal of social reform, this two year period also witnessed the enactment of the legislation in the Tamil Nadu Legislative Assembly making self respect marriages legal. It was Perarignar Anna who seeded the concept of State autonomy which became a major agenda of Dravida Munnetra Kazhagam. I wish to announce that the year 2009 will be celebrated as Anna’s centenary year throughout Tamil Nadu in order to highlight his greatness and familiarise the younger generation with the message of this great personality.

170. With this announcement, I place the Budget for the year 2008-2009 before this House, conveying my heartfelt thanks to the Finance Secretary Thiru K. Gnanadesikan, IAS and other officials of all Government departments including Finance department who have worked tirelessly and co-operated to prepare this Budget.

Vanakkam

K. Anbazhagan
Minister for Finance

Chennai,
20th March 2008
Panguni-7,
Thiruvalluvar Aandu 2039

 

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