CHENNAI: Tamil Nadu economy is showing a robust recovery after being hit by the Covid-19 pandemic as the state’s own tax revenue (SOTR) for the first six months of 2022-23 (April to September 2022) stood at Rs 72,441 crore, up 36.92% compared to same period of last fiscal year. This was 50.73% of budget estimate of Rs 1.42 lakh crore for the full financial year.
According to a review of receipts and expenditure as per budget estimates of 2022-23 done by finance minister PTR Palanivel Thiaga Rajan, who has been instrumental in ushering in financial reforms in the state, the SOTR from commercial taxes, state excise duty and motor vehicle taxes has seen significant uptick due to economic recovery.
Commercial tax revenue, expected to be Rs 1.06 lakh crore as per budget estimates for the whole fiscal year, was Rs 54,494 crore as of September 2022. This was 34.53% more compared to corresponding period of previous year. Of the budget estimate of Rs 10,589 crore under state excise revenue for 2022-23, mop-up for the first six months was Rs 5,351 crore or 53.06% of the estimate. Last fiscal, the state’s excise revenue was Rs 8,237 crore.
The figures for non-tax revenue, however, have not shown much improvement. The budget estimate for State’s Own Non-Tax Revenue (SONTR) was Rs 15,537 crore and collection up to September 2022 was Rs 5,994 crore. It was a growth of 50.83% over Rs 3,974 crore for corresponding period last year and constituted 38.58% of the budgeted estimate for 2022-23.
Failure to revise rates may lead to drop in SONTR receipts: Report
Based on the present trend, it is expected that there may be a shortfall under SONTR receipts due to poor collection and failure to revise rates on certain non-tax items. The total borrowing limit for states in 2022- 23 is 4% of GSDP (Gross State Domestic Product) including an incentive-based additional borrowing of 0.50% for power sector reforms.
“The government is striving to stay within the fiscal deficit target and manage the debt-to-GSDP ratio within the prescribed limits through revenue augmentation and fiscal consolidation. It is also taking proactive steps to reduce the deficit below the budgeted target,” the report said. Meanwhile, of the Rs 43,043 crore allocated for capital expenditure for 2022-23, Rs 13,499 crore or 31.36% of budget estimate has been utilised till September 2022.
This was 18.39% more compared to corresponding period last year (`11,402 crore). The recent shift in the mode of fund transfer and release of funds for centrally-sponsored schemes has caused delay in receipt of funds from the union government.
A considerable shortfall is expected under grants-in-aid receivables from the centre because of this, the report said. Against the estimated Rs 39,759 crore receipts under grants-inaid from the union government, including centrally-sponsored schemes, for 2022-23, money received till September 2022 stood at Rs 18,367 crore or 46.20% of the estimate.
This was 3.67% more compared to corresponding period of 2021- 22 (`17,717 crore). A medium-term fiscal plan (MTFP) was placed before the assembly on Friday by the finance minister to give a snapshot of the state’s finances and the efforts being taken by the state government to bridge the revenue-expenditure gap, if any.
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Snapshot of finances
A medium-term fiscal plan was placed before the assembly on Friday to give a snapshot of the state’s finances and the efforts being taken by the government to bridge the revenue-expenditure gap