Tamil Nadu’s fiscal deficit (the difference between total revenue and expenditure, excluding borrowings) stood at ₹2,605.34 crore in July. The State’s own revenue has shown a positive growth for the month.
This takes the fiscal deficit to ₹21,833.48 crore in fiscal 2020-21 (till July), according to provisional figures of the Comptroller and Auditor General (CAG).
The State’s total receipts (including State’s own tax revenue and share of Central Taxes, among others, and excluding borrowings) grew by about 19.4% to ₹14,041.25 crore in July from ₹11,756.98 crore in the same period last year.
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The State’s own tax revenue grew by about 8% to ₹8,387.23 crore in July from ₹7,765.15 crore in the same period last year.
Within the State’s own tax revenue (SOTR), State Goods and Service Tax (SGST) grew by 27% to ₹2,997.84 crore in July from ₹2,360.40 crore in July 2019.
Another SOTR component, State Excise Duties (which reflects liquor revenue), grew by about 18.5% to ₹696.57 crore in July from ₹587.65 crore in July 2019, while sales tax (which includes VAT on petrol, diesel and liquor) increased to ₹4,013.21 crore from ₹3,820.27 crore.
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Registration Fees
A major component to see a decline in SOTR was stamps and registration fees, which declined by 31.8% to ₹667.04 crore in July from ₹977.53 crore in July 2019.
The State’s share of Union taxes increased by about 8.4% to ₹1,757.96 crore in July from ₹1,622.04 crore in July 2019.
One of the things that has helped the total receipts is the early release of grants-in-aid by the Central government.
The grants-in-aid jumped to ₹2,989.30 crore in July from ₹967.64 crore in July 2019.
The State’s total expenditure stood at ₹16,646.59 crore with revenue expenditure at ₹14,894.48 crore in July.
Under compilation
However, some of the components of revenue expenditure, like expenses on salaries and wages and subsidies, are still under compilation, the CAG said.
Capital expenditure, which goes into infrastructure and other developmental projects, increased by about 24.5% to ₹1,622.91 crore in July from ₹1,303.83 crore in July 2019.
One of the key challenges for States, including Tamil Nadu, has been the increasing expenditure amid the pandemic and a challenging revenue situation.
COVID-19 situation
The Legislative Assembly recently passed the first supplementary budget estimates, amounting to ₹12,845.20 crore for 2020-21, with over 70% or ₹9,027.08 crore provided for COVID-19-related expenditure.
This is in addition to the total expenditure of ₹3,00,390 crore, estimated in the budget for 2020-21.
Tamil Nadu has, so far, borrowed ₹48,000 crore in the first half of 2020-21 (April-September 2020), making it the second biggest borrower after Maharashtra.