It’s official and out in the open. The State government’s financial health is quite bad. It was revealed in an innocuous statement by Chief Minister O. Panneerselvam on Tuesday.
In his letter to Prime Minister Narendra Modi seeking the continuance of subsidy for two naphtha-based plants in the State, the Chief Minister went on record that Tamil Nadu was facing a “huge financial crunch.”
“Any additional financial outgo at this juncture would be very difficult to manage considering the limited sources of revenue to the State,” he wrote.
The statistics behind the statement is quite alarming.
At the beginning of the current financial year (2014-2015), it was projected that the State government would achieve a revenue surplus of about Rs. 289 crore. But, the calculations of the authorities have gone wrong as the State recorded a revenue deficit of Rs. 7,652 crore at the end of the first half of the year.
The State’s Own Tax Revenue, constituting a little more than two-thirds of the total revenue receipts, has not netted as much money as it should have, going by the State’s performance during April-September 2014.
Of the various components of the State’s Own Tax Revenue, not a single component met the target, even though the showing in commercial taxes’ collections was quite close to the projected growth rate.
“The performance in respect of excise and registration is disappointing,” acknowledges a senior official.
In fact, when the Assembly met early this month, the House was even informed of the trends in receipts and expenditure of the government through a routine report which went unnoticed.
The early signs of the declining financial health were visible even during the previous year (2013-2014) when the State registered a revenue deficit of about Rs 1,790 crore, as per supplementary accounts. The revenue deficit came after two successive years of revenue surplus.
