Tamil Nadu Finance Minister Palanivel Thiaga Rajan on Wednesday said that with the improving financial position, the State is likely to increase its capital expenditure over three-fold in three years’ time.

“We are going to go to something like ₹90,000- 95,000 crore a year in capital expenditure from the current level of ₹25,000 crore a year,” he said in his inaugural address at the 12th edition of the Annual Finance Conclave, organised by the Confederation of Indian Industry, Tamil Nadu, in Chennai on Wednesday.

Mr. Thiaga Rajan said that at one point of time, Tamil Nadu used to have capital expenditure close to 3-4% of the Gross State Domestic product (GSDP), every year. However, he pointed out that it continuously dropped from 2014 onwards, and went down to about 1% of the GSDP when the COVID-19 pandemic hit. Last year (2021-22) the capital expenditure was 1.5% of the GSDP and we are likely to take it to 2.5-3% this year, Mr. Thiaga Rajan said.

The Minister said Tamil Nadu’s revenue deficit has been brought down by ₹16,000 crore in 2021-22. As a result, the fiscal deficit has been better than the revised estimates. The fiscal deficit is at 3.38% of the GSDP in 2021-22 as per the final accounts, which is lower than the 3.85% limit set by the Union government, Mr. Thiaga Rajan said.

As per the recommendations of the 15th Finance Commission accepted by the Union government, States can roll over the remaining borrowing capacity from last year, he said.

Mr. Thiaga Rajan also reiterated that the State is on course to repeat the good performance of last year, if the economic parameters remain as they are.