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Development with care and compassion State finances in an era of transition Curtain Raiser
 
State finances in an era of transition

The much awaited forward looking reform, the introduction of GST from July 2017, is expected to bring uniformity in taxation and price level, better tax administration and improved fiscal administration. In this context the southern state budgets for 2017-18 look routine and formal. 

Except Telangana and Karnataka the other southern states have proposed to leave revenue deficits for the ensuing year. The revenue deficit for Andhra Pradesh is expected to decline while for Tamil Nadu and Kerala to go up.

Fiscal deficits are expected to be greater than 3 per cent of SGDP for Telangana and Kerala. The states continue with their focus as welfare. With liberal provisions for food, education, women, ST, SC, BC and MBC. 

In line with the Centre, state governments propose to replace the state planning commissions with the State Development Policy Councils.

Tamil Nadu 

The Tamil Nadu budget for 2017-18 contains no changes in the tax rates.   However, VAT has been increased from 27 per cent to 34 per cent and 21.4 per cent to 25 per cent on petrol and diesel respectively a few days before presentation of budget.

Andhra Pradesh

The government has not made any changes in the existing taxes.

Telangana

No proposals made regarding tax rates.

Karnataka

Extended tax exemption on paddy, rice, wheat, pulses and products of rice, raggi rice, on minor millets, coconut and pulses.

Enhancement of tax on two wheelers costing more than a lakh of rupees from 12 per cent to 18 per cent. Withdrawal of administrative fee on import and export of spirit.    

Kerala

Tax rates reduced on consumer goods from 6 per cent to 5 per cent; on solar energy devices slashed from 14.5 per cent to 1 per cent. Tax exemptions have been announced for agricultural products, packaging materials used in exporting goods and natural rubber.



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