Tamil Nadu

Tamil Nadu posts lower than expected revenue deficit in FY22

Tamil Nadu’s revenue deficit (which implies that revenue expenditure is higher than revenue receipts) stood at ₹41,685.94 crore in the fiscal 2022, according to unaudited provisional figures from the Comptroller and Auditor-General India. It is lower than the ₹55,272.79 crore projected in the revised estimates for 2021-22.

Better expenditure management and a higher share of the Central taxes have helped the State. According to the provisional figures, Tamil Nadu’s total revenue receipts were ₹2,05,894.051 crore in the fiscal 2022. The revised budget estimates expected them to be ₹2,03,878.17 crore for 2021-22.

The State’s Own Tax Revenue (SOTR), which accounts for over 70% of the revenue, came in at ₹1,16,717.23 crore. This is lower than the ₹1,21,857.55 crore projected in the revised estimates.

In his 2022-23 budget speech, Finance Minister Palanivel Thiaga Rajan pointed out that the pandemic and the unprecedented floods had severely affected the SOTR in FY2022 and therefore he revised the estimates down from ₹1,26,644.15 crore in the earlier estimates.

Revenue from stamps and registration fees, value added tax on petrol and diesel, excise duty on liquor, the Motor Vehicle Tax, the State Goods and Services Tax and land revenue are the components of SOTR.

The State earned ₹14,330.97 crore from stamps and registration fees, ₹45,276.36 crore from the State GST, ₹48,668.35 crore from taxes on sale and trade etc., (which also reflect sales tax on liquor) and ₹8,236.62 crore from the State excise duty in FY22, according to the provisional figures. Land revenue was at ₹204.93 crore.

Last fiscal, Tamil Nadu increased excise duty on liquor to boost revenue. In FY22, the State’s share of the Union Taxes was at ₹37,458.62 crore, compared to the revised budget estimate of ₹33,580.22 crore.

Mr. Rajan had pointed out in his budget speech that there was an increase in the share in the Central taxes component due to the increased tax collection realised by the Union government and the release of arrears to the State; as a result, the estimate was revised upwards from the earlier expectation of ₹27,148.31 crore for FY 2022.

The State’s revenue expenditure was at ₹2,47,579.99 crore in FY 2022, lower than the revised estimate of ₹2,59,150.97 crore. The fiscal deficit for FY2022 was at ₹76,293.44 crore. As per the revised estimate, the fiscal deficit was expected at ₹82,732 crore for 2021-22, excluding the ₹8,095 crore back-to-back loan in lieu of the GST compensation. The fiscal deficit is the difference between total revenue and expenditure.

Mr. Rajan had told reporters recently that the State was confident of achieving the objectives of progressive fiscal consolidation and debt sustainability, as stated in its medium-term fiscal plan presented during the 2022-23 budget.

Under the medium-term fiscal plan, a fiscal path is being laid to reduce the revenue deficit in phases, thereby enhancing the allocation for creation of productive assets.

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Printable version | May 23, 2022 6:55:11 pm | https://www.thehindu.com/news/national/tamil-nadu/tamil-nadu-posts-lower-than-expected-revenue-deficit-in-fy22/article65447279.ece