CHENNAI: The Tamil Nadu government has constituted a high-level revenue augmentation committee, headed by noted economist and former deputy chairman of Planning Commission Montek Singh Ahluwalia, to recommend measures to strengthen revenue mobilisation and improve tax administration. The committee will submit its reports and recommendations within three months.
Economist Dr KP Krishnan, tax policy expert Arbind Modi, former CBEC Chairman Najib Shah (retd), Finance Department Additional Chief Secretary MA Siddique, and director of the Madras Institute of Development Studies Dr M Suresh Babu are the other members of the committee.
A GO dated July 24 said the government’s decision to set up the panel follows the findings of the White Paper on Fiscal Management of Tamil Nadu, released in June 2026, which observed that the state’s decline in own-tax revenue was largely due to administrative shortcomings, leakages and corruption, rather than an economic slowdown.
According to the White Paper, Tamil Nadu’s own-tax revenue-to-GSDP ratio declined to 5.45% in 2025-26, the lowest in two decades.
Finance dept to serve as panel’s secretariat
The annual revenue foregone was estimated at about Rs 1.23 lakh crore, equivalent to nearly 90% of the fiscal deficit for the year. The panel has been tasked with identifying measures to improve revenue collection in commercial taxes, registration, excise, mining and motor vehicles sectors, recommend reforms to plug leakages and improve compliance, and suggest technological and systemic improvements in revenue-collecting departments.
It has also been asked to recommend changes to increase liquor revenue. The govt has empowered the committee to call for records, returns and reports, PSU, board or revenue-collecting agency, and require officers to appear before it. It may also constitute sub-committees for specific revenue heads and invite experts and senior officials as special invitees. The state finance department will serve as the committee’s secretariat.
White Paper flagged dip in SOTR
According to a recent White Paper, decline in state’s own-tax revenue (SOTR) was largely due to administrative shortcomings and corruption, and not because of economic slowdown