Tamil Nadu

In TN, State’s own tax revenue saw marginal decline in Dec 2021

Photograph used for representational purposes only

The Tamil Nadu government’s own revenue saw a marginal decline of over 3% in December 2021 when compared to the same period in 2020, amid the spread of the third wave of COVID-19. State’s Own Tax Revenue (SOTR) account for over 70% of the total revenue.

In December 2021, the SOTR was ₹9,404.55 crore, when compared to ₹9,767.22 crore in same period in 2020, according to provisional figures of Comptroller and Auditor General (CAG). Among the SOTR components, State GST revenue declined about 8.5% to ₹3,123.09 crore in December 2021 from ₹3,414.33 crore in same period in 2020.

Taxes on Sales, Trade among others (which reflects tax on petroleum products and sales tax on liquor), declined about 5.6% to ₹4,059.74 crore in December 2021 from ₹4,301.31 crore in the same period in 2020. Other components of SOTR saw an increase in December.

State Excise duties, which partly reflects liquor revenue, increased over 13% to ₹780.65 crore in December 2021, when compared to ₹686.49 crore in December 2020.

Revenue from Stamps and Registration Fees increased 5.42% to ₹1,415.84 crore in December 2021 from ₹1,342.97 crore in December 2020, while land revenue increased about 14% to ₹25.23 crore from ₹22.12 crore.

Overall Tamil Nadu’s total revenue receipts so far in the fiscal 2021-22 (till December) stood at ₹1,33,872.67 crore and the revenue expenditure stood at ₹1,52,268.59 crore, resulting in a revenue deficit of ₹18,395.92 crore. Revenue deficit implies that the government’s earnings were not adequate to cover its day-to-day operational expenses such as salaries and interest payments.

Fiscal deficit, the difference between total revenue and total expenditure till December 2021, stood at ₹40,613.94 crore. The State’s Share of Union Taxes stood at ₹18,368.14 crore till December.

Higher tax devolution

On the positive side, as per the revised Union Budget estimates for 2021-22, Tamil Nadu will get ₹30,355.63 crore as tax devolution, higher than the ₹27,148.31 crore projected in the earlier estimates. This may ease the financial burden on Tamil Nadu to an extent. Also with the COVID-19 restrictions lifted, there might not be a huge impact on revenue.

Though the Centre has allowed States a fiscal deficit of 4% of Gross State Domestic Product for 2022-23, 0.5% of this will be subject to power sector reforms. The Union Budget was also silent on the extension of GST compensation period beyond June 2022.

The Tamil Nadu Budget, to be presented for 2022-23, will be keenly watched for how the State has managed its fiscal position in 2021-22 and also for how it addresses the challenges ahead in the next financial year.


Our code of editorial values

Related Topics
This article is closed for comments.
Please Email the Editor

Printable version | Apr 30, 2022 10:01:17 pm | https://www.thehindu.com/news/national/tamil-nadu/in-tn-states-own-tax-revenue-saw-marginal-decline-in-dec-2021/article38417980.ece