Every family in Tamil Nadu, has public debt of Rs 2.63 lakh reveals government report

Tamil Nadu Minister for Finance and Human Resources Management P. T. R. Palanivel Thiagarajan published the White Paper on the state’s finances to the public at 11.30 am in the Conference Hall at Namakkal Kavignar Maaligai at the Secretariat in Chennai. Addressing the public, the minister said the worsening deficit situation has led the state to be over-reliant on debts. The public debt is Rs 2,63,976 per family in Tamil Nadu. The minister said that total revenue receipts of Tamil Nadu has declined to 8.7% of GSDP in 2020-21 from the peak 13.35% of GSDP in 2008-09. SOTR has declined from 11.46% between 2006 to 2011 to 4.32% between 2016 to 2021. “Zero Budget is beneficial only for financially empowered”, he said. Thiagarajan said grants in aids increased from 8.13% from 2006 to 2007 to 17.10% of revenue receipts in 2020 to 2021 which undermines the financial independence and federalism. “Tamil Nadu lost Rs 2,577 crores since the previous government failed to conduct local body election on time”, the minister said.

Releasing the 120 page report, Palanivel Thiagarajan said that the financial position of the state saw a steady deterioration from 2013-14 due to revenue and fiscal deficits and the Covid pandemic further deteriorated the situation financial situation. He further stated that the raising revenue deficit-driven fiscal deficits were mainly due to borrowing and the debt outstanding was Rs 5,70,189 cr in 2022 and it amounts to 70,000 on every citizen of the state. Due to continuous borrowing, Tamil Nadu reached the point where the state could borrow without guarantees and it doubled to Rs 91,818,44 crore in year 2020-21.The minister said that the state's own tax revenue declined from 13.35% in 2008-09 to 5.46% in 2020-21 and the decline of Tamil Nadu's state own tax revenue to GSDP ratio is of at greater concern as it fell below the national average in 2018-19.He also pointed out that the Motor Vehicle Tax has not changed in last 15 years and the electricity tax rationalization also is over due. During the press meet he also hinted that there is need for radical change in the taxation and it happened due to inept administration and inability to prevent the large-scale leakages. Commenting on the state's expenditures, he said the expenditures went down from 62.9% in 2011-12 to 57.5% in 2018-19 and the state lost 2,577 cr grant from the Union Government as the AIADMK government failed to hold local body elections. Palanivel Thiagarajan added that the financial problems that the state is facing can be corrected only if the state stops "business as usual" approach and promised that the white paper was not released to abandon the poll promises made by the Tamil Nadu CM MK Stalin during the elections.