CHENNAI:The 15th Finance Commission has observed that the structure of GSDP (gross state domestic product) in Tamil Nadu has been shifting away from agriculture towards industry and services. From 2012-13 to 2016-17, the average share of agriculture and allied sector was 10.9 per cent, industry was 35 per cent and that of services was 54.6 per cent.
The Commission has revealed this in a release ahead of its visit to Tamil Nadu on September 5 and 6 to have a series of meetings with Chief Minister Edappadi K Palaniswami, ministers and officials at the secretariat on September 6. Tamil Nadu is the second State in southern India after Kerala to be visited by the panel.
The delegation to be led by chairman NK Singh will meet economists of the region on September 5. It will also meet leaders of various parties and representatives of trade and industry, urban local bodies and panchayati raj institutions to be seized of the issues concerning the State.
The Finance Commission’s release recalled that after a decline in 2015-16, the GDP of Tamil Nadu has picked up. However, the declining growth rate of own tax revenue in recent years, particularly from 2013-14 onwards, is a concern. Since 2013-14, due to a combination of factors such as slow revenue growth, spurt in exceptional expenditure like UDAY, Pay Commission award and drastic reduction in Central devolution, the State has been witnessing revenue deficits. Its capital expenditure is also low.
“As per the RBI study of state budgets, TN is among the highest borrowing States. Its fiscal deficit stood above four per cent and debt to the GDP ratio stands at 22.31 per cent in 2016-17,” the Commission said and added that the delegation would look into the issues relating to the GST collections. Stating that power sector is not fully unbundled in the State, the Commission would try to understand the issues related to the implementation of UDAY scheme.
“In education sector, the state is depicting weak learning outcomes as per the ASER 2016-17 report, despite having high literacy rates. The State has done well in the democratic decentralisation to the third tier,” the Commission has added.
Though Tamil Nadu has done well in economic uplift of the people, an inter-district disparity in per capita income (PCI) is evident. Eighteen out of 32 districts are having lower PCI than the State average PCI (`1,54,375 in 2015-16). The PCI of the top-ranked district is about 2.8 times bigger than that of the poorest district. Though poverty in Tamil Nadu is lower than many states of the country, parts of Tamil Nadu are having high poverty. The State intervention is resulting in fast decline in poverty ratios and nearly all of this reduction in the number of families below poverty line comes from rural areas, the 15th Finance Commission has noted.
GDP has picked up
The Finance Commission’s release recalled that after a decline in 2015-16, the GDP of Tamil Nadu has picked up. However, the declining growth rate of own tax revenue in recent years, particularly from 2013-14 onwards, is a concern.