Need for TN to ensure growth: Fitch

CHENNAI: Global agency Fitch Ratings on Wednesday said Tamil Nadu needed to maintain its growth momentum, control untargeted subsidies and reduce its power sector deficit if it had to meet its own medium term fiscal targets for 2013.
The report's conclusions are by and large in line with the state government's stand that its debt position is relatively low and sustainable and that its current fiscal situation is a fallout of higher expenditure on welfare schemes and salaries in a low-growth year, and once the state moves into a higher growth trajectory in the next two years, it would result in fiscal consolidation and its medium term targets are achievable.
"Deterioration" in the state government's fiscal profile due to salary and pension revisions, a high growth in subsidies and dismal performance in collecting non-tax revenue put the state's revenue account in deficit mode in 2009-10, the special report said.
However, it added that the state's fiscal situation was improving and that its economic growth was also likely to increase.