He said the state economy in 1998-99 can be said to be in its growth phase and the gross domestic product is expected to register a growth of 6.78 per cent as against a growth of 6.31 per cent last year.

Revenue receipts during 1999-2000 are estimated to be at Rs 15867.78 crore and revenue expenditure Rs 18500.32 crore, leaving an overall deficit of Rs 790.13 crore. Additional revenue from taxes are estimated to be Rs 261 crore leaving a gap of Rs 529.13 crore.

In 1998-99 budget estimates the overall deficit was estimated to be at Rs 879.67 crore. But in the revised estimate, this deficit has come down to Rs 235.73 crore, Karunanidhisaid.

Similarly the estimate of revenue receipt was Rs 15039.46 crore and the estimate of revenue expenditure was Rs 18048.04 crore. But in the revised estimates for this year, revenue receipts have decreased to Rs 14198.52 crore and expenditure to Rs 17183.94 crore.

During 1999-2000, besides raking in tax revenue, the government plans to mop up additional resources through a number of non-budgetary measures to cover this deficit. Bonds issue by Tamil Nadu Electricity Board (TNEB), export of sandalwoods, leasing of granite mines, accelerating collection of sales tax arrears through State `Samadhan' scheme (similar to the central scheme), ending registration disputes by granting concessions for immediate settlement and increasing small savings collections are some of the additional resources mobilisation measures proposed in the budget.

``The government has decided to utilise to the maximum the contemporary innovation in the information technology for the economic and social development of the state'',Karunanidhi said. In order to materialise the plan, tax rates on items like computer peripherals, uninterrupted power supply systems, several other infotech and electronic items, cellular phones are reduced. Tax rates on items like bullion, precious stones, bulbs, greeting cards manmade fibres, Rep licences etc have been reduced to be on par with rates in neighbouring states.

However sales tax on television sets is increased from four per cent 10 per cent. A five per cent luxury tax is imposed on cigarettes and other `luxury' tobacco products, excluding beedis.

Excise duty on Indian made foreign liquor is being increased by Rs 10 per proof litre. However there is no duty hike on ordinary brands sold in 100 ml bottles.

Tax on private service vehicles is increased from Rs 50 per seat per quarter to Rs 75 and on Maxi-cabs Rs 1800 per quarter to Rs 2100.

Restructuring of industry development organisation based on the recommendations of the SVS Raghavan committee is another major step in the budget.Accordingly Tamilnadu Corporation for Industrial Infrastructure Development (Tacid) will be merged with the State Industrial Promotion Corporation of Tamilnadu (Sipcot). Similarly the Transport Development Finance Corporation (TNDFC) and Tamilnadu Power Finance Corporation (TNPFC) will be merged to create Tamil Nadu Infrastructure Finance Corporation (TIFC). The Industrial Guidance and Export Promotion Bureau will be merged with Tidco.

The Plan outlay for the TNEB is increased to Rs 1034 crore. The state transport corporations which are expected to incur a loss of Rs 400 crore during the current financial year, will get an allocation of Rs 100 crore as government equity investment and Rs 80 crore for reimbursement of free bus passes issued to students.

Major investments are being made for several development schemes like Rs 4,092 crore for education, Rs 2,023 crore allocated to local bodies, Rs 1,079 crore for health and family welfare, Rs 509 crore for Adi-dravidar and Tribal welfare, Rs 150 crore forwelfare of backward classes and most backward classes and Rs 50 lakh each for MLA constituency development scheme.

The outlay for rural water supply is increased from Rs 330 crore to Rs 450 crore, Rs 50 crore allocation and loans of over Rs 100 are provided for a Special Golden Jubilee Year Programme, desilting operations in irrigation facilities are allocated Rs 50 crore and Rs 219 crore for Water Resources Consolidation project in the next year.

Rural roads and Rural Infrastructure Development Fund are provided Rs 256 crore and Rs 270 crore for maintenance of roads including a provision of Rs 100 crore earmarked for mechanised relaying.