Last fiscal, the State was hit by lower revenue collections due to the first wave of the pandemic
Tamil Nadu’s fiscal deficit (the difference between total revenue and expenditure) stood at ₹92,305 crore for fiscal 2020-21, according to un-audited provisional figures from the Comptroller and Auditor General (CAG).
Last fiscal, the State was hit by lower revenue collections due to the impact of the first wave of COVID-19 on the one hand and increasing expenditure to tackle the pandemic, on the other.
As per provisional figures, the State’s total receipts (including State’s own tax revenue (SOTR) and the share of Central taxes among others and excluding borrowings) stood at ₹1,74,255.66 crore, while the total expenditure stood at ₹2,66,560.73 crore, resulting in fiscal deficit.
The total receipts for 2020-21 declined by 2.8% from ₹1,79,282.03 crore in 2019-20.
The total expenditure increased by 14.7% in 2020-21, from the year-ago figure of ₹2,32,320.64 crore.
State’s own tax revenue
The SOTR, which accounts for 70% of Tamil Nadu’s total revenue, was flat at ₹1,01,140.09 crore in 2020-21 when compared to last year.
Among the components of SOTR, liquor revenue, which gets partly reflected through State excise duties and stamps and registration fees, showed a positive growth in 2020-21, while State GST, VAT collections and land revenue showed negative growth.
State excise duties grew by 8.5% to ₹7,821.66 crore in 2020-21, from ₹7,205.97 crore in 2019-2020.
Taxes on sales, trade, etc. (which reflects tax on petroleum products and sales tax on liquor) declined by 2.3% to ₹43,490.05 crore in 2020-21 from ₹44,517.53 crore in 2019-20.
The State’s GST collection declined by 1.12% to ₹37,942.08 crore in 2020-21 from ₹38,374.49 crore in 2019-20.
Revenue from stamps and registration fees increased by 7.54% to ₹11,675.11 crore in 2020-21 from ₹10,855.65 crore in 2019-20.
The State’s share of Central taxes declined by 5.56% to ₹24,924.51 crore from ₹26,392.41 crore in the same period last year.
Tamil Nadu’s revenue expenditure increased by 13.3% to ₹2,30,332.73 crore in 2020-21, when compared to ₹2,03,236.86 crore in 2019-20.
The State’s revenue deficit stood at ₹61,320.46 crore in 2020-21. Revenue deficit is the difference between the government’s revenue receipts and revenue expenditure, and says that the government’s earnings are not adequate to meet its day-to-day operational expenses.
The interim budget presented by the then AIADMK government, before the Assembly poll, had pegged the revenue deficit at ₹65,994.06 crore and fiscal deficit at ₹96,889.97 crore for 2020-21. The actual figures will be known when the new DMK government presents the full budget.
With the intense lockdown announcement to curb the second wave of COVID-19, the stress on Tamil Nadu’s finances is likely to continue this fiscal too.
Source: Read Full Article