Tamil Nadu Finance Secretary K. Shanmugam on Thursday strongly defended the government spending on social schemes and said it is the reason why the gap between the rich and the poor is narrower in the State.
“When we compare Tamil Nadu’s revenue deficit with other States, we need to take into account the fact that our State has some unique welfare schemes including insurance for poor and marriage assistance schemes, which are not there in other States. So, our revenue expenditure is higher,” he said at a press conference post the budget.
He noted that the State spends ₹72,000 crore annually on welfare schemes and other subsidies. Out of it, only ₹15,000 crore goes for food, electricity and diesel as subsidies, while the remaining goes towards various welfare schemes.
He admitted that the State Own Tax Revenue has not been growing significantly due to the general slowdown in economy, but added that the government is working towards improving its tax collection efficiency.
Asked whether the government would be looking at new revenue streams like mining, he replied in the affirmative. However, he added that the State has little scope for alternative sources of revenue when compared to the Centre which has sources like income tax and customs.
“The major source for the State is sales tax, which accounts for 70% of revenues. The State is confident of managing its finances better,” Mr. Shanmugam added.
