No new taxes proposed in Tamil Nadu's Budget for FY16

Keeping an eye on next year's assembly polls, Tamil Nadu Chief Minister O Panneerselvam has offered a slew of sops for the fishermen community as well as the manufacturing sector, and proposed no new taxes in the Rs 4,616 crore deficit Budget for FY16.

Panneerselvam, who also holds the Finance portfolio, announced exemption of VAT on fishing accessories like fishing ropes and floats, fish net twine, fishing lamps and fishing swivel, apparently to appease the vast fishermen community. Besides, the government reduced VAT on mobile phones from 14.5 percent to five percent.

Presenting the Budget, Panneerselvam said the state has to rely more on its own strength, besides slow growth in States' Own Tax Revenue (SOTR), even as devolution and grants in aid of the Centre are expected to go down.

"Notwithstanding this increased financial burden and the slow growth in SOTR, our government has decided not to impose any new tax," he said. The opposition DMK boycotted the proceedings and staged a walkout after its floor leader M K Stalin was denied permission by Speaker P Dhanapal to raise some issues.

Among tax sops offered by the government, which Panneerselvam termed as 'critical concessions' to boost the manufacturing sector, were withdrawal of electricity tax on plants using biomass, excluding bagasse.

He said the government proposes to raise net borrowings to Rs 30,446.68 crore and overall outstanding debt would be in excess of Rs 2.11 lakh crore by end of March 2016. However, the fiscal deficit would remain at 2.89 percent of Gross State Domestic Product as against the norm of three percent.