Tamil Nadu

Tamil Nadu’s fiscal deficit stood at ₹22,269 crore in first half of 2021-22

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Tamil Nadu’s fiscal deficit (the difference between total revenue and expenditure) stood at ₹22,269 crore in the first half of 2021-22. Its revenue collection improved, but expenditure remained higher.

According to unaudited provisional figures from the Comptroller and Auditor-General (CAG), the State’s total receipts (including the State’s Own Tax Revenue and the share of Central Taxes, among others, and excluding borrowings) was ₹85,452.77 crore in April-September 2021, up 26.2% from ₹67,707.63 crore in the comparable period last year. The State’s Own Tax Revenue, which accounts for 70% of the total revenue, increased 36.35% to ₹50,324.31 crore in the first half of 2021-22 from ₹36,907.46 crore in the first half of 2020-21.

The revenue in the first half of 2020-21 was impacted by a stringent lockdown imposed to curb the first wave of COVID-19. This year, the lockdown was imposed for only a few months to control the second wave, and this has helped in a higher revenue collection.

Among the State’s Own Tax Revenue components, revenue from stamps and registration fees increased 74% to ₹6,236.55 crore in the first half of 2021-22 from ₹3,586.56 crore in the comparable period last year. The State’s Goods and Services Tax collection increased about 39.9% to ₹19,173.05 crore in the first half of 2021-22, compared with ₹13,700.47 crore in the same period last year.

Taxes on sales and trade (including the tax on petroleum products and sales tax on liquor) increased 30.3% to ₹21,327.53 crore in the first half of 2021-22 from ₹16,366.68 crore in the comparable period. The State had cut the petrol price by ₹3 by reducing the sales tax. The revenue from excise duties grew 9.6% to ₹3,496.07 crore in the first half of 2021-22 from ₹3,190.03 crore in the same period last year.

RBI report

The recent report by the Reserve Bank of India, ‘State Finances: A Study of Budgets of 2021-22’, pointed out that so far in 2021-22, revenue receipts of the States had posted a robust growth, driven by their own tax revenue. Higher devolution and front-loading of the GST compensation by the Union Government had provided a cushion.

Tamil Nadu received ₹10,611.38 crore as share of the Union Taxes in the first half of 2021-22 and ₹17,716.54 crore as grants-in-aid and contributions. The State’s total expenditure increased to ₹1,07,722.32 crore in the first half of 2021-22 from ₹98,913.22 crore. Its revenue expenditure increased to ₹94,628.34 crore in the first half of 2021-22 from ₹90,991.27 crore.

The RBI report said the Tamil Nadu Government had incurred an additional expenditure of ₹17,618.8 crore on account of COVID-19 relief this year. It said the States’ revenue expenditure subsided by July.

Tamil Nadu fiscal deficit was lower than ₹31,205.59 crore in the first half of last year. Revenue deficit was ₹9,418.60 crore in the first half of 2021-22, down from ₹23,591.04 crore in the first half of last year. Last month, Tamil Nadu Finance Minister Palanivel Thiaga Rajan said the State would reduce its revenue deficit during 2021-22.


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Printable version | Jan 25, 2022 5:44:25 AM | https://www.thehindu.com/news/national/tamil-nadu/tamil-nadus-fiscal-deficit-stood-at-22269-crore-in-first-half-of-2021-22/article37814514.ece

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