The Tamil Nadu government has indicated that the revenue deficit will increase over and above the budgeted ₹15,930 crore for the first six months of this financial year. Implementation of the Seventh Pay Commission is cited as one of the major reasons for this increase.
According to the review of trends in receipts and expenditure in relation to the budget estimates for 2017-2018 tabled in the Assembly on Friday, the implementation of the Seventh Pay Commission’s revision will have an additional impact of ₹6,480 crore on the State’s finances on account of revised salaries and pension.
Commercial tax
For the first half of this financial year, commercial taxes have also taken a beating. The Supreme Court’s ban on liquor shops on National and State highways made a huge negative impact on commercial tax collection. The state excise tax collections up to September 2017 stood at ₹2,765 crore against ₹3,061 crore for the same period in 2016.
Revenue collections from stamps and registration fees also registered a negative growth. The collections up to September 2017 was ₹4,324 crore compared to ₹4,374 crore last year.
In 2017, the Madras High Court stayed the registration of unapproved plots. A few months later, the State government had reduced the guideline value by 33% and increased the stamp duty and registration fees to spur registration of lands.
The State government said that it was taking all measures to compensate the current losses. It has made an upward revision in the state excise duty on Indian Made Foreign Liquor (IMFL) and also revised its base rate. Issues relating to unapproved layouts were also being looked at, the government said.
