Thread by @Shilpa1308

Thread on White Paper released by Tamil Nadu finance minister P Thiagarajan:

- Revenue deficit of TN has been deteriorating for the last 8 years. Such a long term trend has affected the development investments.

Revenue deficit : 3.16 as % of GSDP for FY 2020-21.

Fiscal deficit of the state has been primarily increasing due to increase in govt borrowing.

Fiscal deficit is 4.43 as % of GSDP.

The public debt is Rs 2,63,976 per family in TN.

Public debt as % of GSDP is 26.69%, which is above the allowed limit of 25%.

Outstanding debt of GoTN has been metioned as Rs 4,85,503 crores until now. However, if we consider "other means" of financing the fiscal deficit the real debt is Rs 5,24,574 crores.

Outstanding govt guarantees for 2020-21 was Rs 91,818 crores. This is 4.72% of GSDP, which is 3rd highest in India.

Higher quantum of Govt Guarantees will lead to low credit rating of govt.

95% govt guarantees is on account of Power (90%) & Transport (5%) sector borrowings.

Total revenue receipts declined to 8.7% of GSDP in 2020-21 from the peak 13.35% of GSDP in 2008-09.

State's Own Tax Revenue registered a significant decline.

Commerical taxes, a main component of the State's Own Tax Revenue, was on a decreasing trend even before GST was introduced.

TN has a lower tax rates than many states leading to continued loss in Revenues. Eg: Motor vehicle tax rates have not been revised in the past 15 years.

Tamil Nadu has 6.124% share of the population of the country but only 4.079% share in the total tax revenue of the country, which is a proportion of 66.607%. This is third lowest in the country.

Proportion of Cesses and Surcharges has gone up from 10.4% in 2011-12 to 20.2% in 2019-20. These Cesses and Surcharges are not shareable with the States.

Union govt's levies on petrol increased substantially.

Outstanding GST compensation for 2021-22 (estimated) is Rs 20,033 crore.

Subsidies amounted 12.65% (Rs 4841.80 crores) of Revenue Expenditure and 1.48% of GSDP in 2006-07. This has increased to 27.06% (Rs 62,338.84 crores) of Revenue Expenditure and 3.21% of GSDP in 2020-21.

High increase in subsidy amounts calls for some urgent measures for improving and re-orientation of subsidies.

Power subsidy is the highest at 1.10% of GSDP.

Food subsidy- 0.49% of GSDP

Transport subsidy- 0.19% of GSDP

Tamil Nadu has been recording declining developmental expenditure trend.

Local bodies have not been paying for electricity and water availed from TANGEDCO and TWAD board. Total outstanding of Rs 1743.30 crores.

Out of 69 PSUs + SBs, 26 are loss making. Their poor financial condition leads to deterioration in the quality of services. Hence, reforms in this area cannot be postponed any further.

Outstanding debt of TANGEDCO, TANTRANSCO and STUs is Rs 1,99,527.55 crores put together.

Accumulated loss of the State Transport Undertakings in 2020-21 is Rs 42,143 crores.

Outstanding debt of power sector PSUs is Rs 1,34,119.94 crores. It was Rs 31,040.12 crores in 2011-12.

Outstanding liabilities of TWAD is Rs 2890.26 crores. It was Rs 422.24 crore in 2011-12.

Average Annual Growth Rate of GSDP in TN has reduced from 10.15% in 2006-11 to 7.22% in between 2016-20.

Demonetization, hurried adaptation of GST, stagnation in economic activity due to Covid has further aggravated the growth issue.

Poor growth rate and fiscal erosion of the state can be attributed to lack of fiscal discipline and management.