Finance Minister Palanivel Thiaga Rajan said on Friday that COVID-19 and unprecedented floods severely affected the State’s Own Tax Revenue (SOTR) in 2021-22. He announced incremental reforms to plug revenue leakages.
The SOTR accounts for over 70% of Tamil Nadu’s total revenue, and is expected to be ₹1,21,857.55 crore now, down from the earlier estimate of ₹1,26,644.15 crore for 2021-22.
The major components of SOTR are the State GST, value-added tax on petroleum products and stamp duty and registration fees and liquor revenue. Recently, the State increased excise duty on liquor to boost revenue.
However, it is expected to increase by 17.2% to ₹1.,42,800 crore in 2022-23 from the revised figure for 2021-22.
At a post budget press conference, Finance Secretary N. Muruganandam said the increase was expected with the economic recovery.
Asked why the budget did not have any measure to augment revenue, he said the Finance Minister in his speech announced reforms to plug leakages and improve tax collection.
In his speech, Mr. Thiaga Rajan pointed to the use of data-driven governance to eliminate leakages and facilitate focussed delivery of funds and services. The government would take measures to increase the efficiency in tax collection, he added.
The Finance Minister said a high-level committee, headed by a retired officer of the Indian Audit and Accounts Service, had been set up to review the functioning of the audit departments and make recommendations for reforms. This committee would submit its report in four months.
Mr. Thiaga Rajan said the e-procurement system would be made mandatory for all procurement by government and public sector entities from April 1, 2023. The government would amend the Tamil Nadu Transparency in Tenders Rules for this purpose.
He said that to reduce revenue deficit in phases, the priority would be for revenue resources and measures to improve it.
Mr. Thiaga Rajan said the expenditure profile would be improved through enhanced allocation to growth-oriented expenditure and through rationalisation of revenue expenditure.
The Net Public Debt for 2022-23 was projected at ₹90,116.52 crore, taking the total outstanding debt to ₹6,53, 348.73 crore as on March 31, 2023, while the Debt-GSDP ratio would be 26.29%, within the limits set by the Finance Commission, he said.
