OPS cites slowdown, introduction of GST for fall in revenue growth

AIADMK coordinator O. Panneerselvam on Thursday attributed economic slowdown and the introduction of Goods and Services (GST) Tax to the inadequate rate of growth in the State’s Own Tax Revenue (SOTR) in the last five years.

Responding to the criticism levelled by the DMK government in the White Paper and the Budget on various aspects of the previous AIADMK regime’s handling of the economy during 2011-21, Mr. Panneerselvam issued a statement running to about 40 pages.

In it, he said that after 2015-16, the implementation of the Fourteenth Finance Commission’s recommendations had led to the State losing ₹7,000 crore annually in real terms. Since 2016-17, the Central government, which had scrapped certain Centrally-sponsored schemes, also increased the State’s share from 60% to 75% in the schemes in general. “Considering the interest of people, we continued to implement the schemes which were dropped by the Centre,” he said, pointing out that this had caused an additional burden of ₹7,000 crore to the State.

Tangedco debt

Besides, the State government had absorbed the outstanding debt of the Tamil Nadu Generation and Distribution Corporation (Tangedco) to the tune of ₹22,500 crore. This had pushed up the revenue deficit and the State’s debt. A portion of the debt — ₹ 4,563 crore — was provided as grants every year for adjusting the loans given to Tangedco.

As a result of the implementation of the recommendations of the 7th Pay Commission for government staff and teachers, the expenditure went up by ₹15,000 crore. “With the White Paper pointing out some of these aspects and leaving out some others conveniently, a deceptive picture has been sought to be portrayed as if tax revenue had fallen due to administrative inefficiency,” Mr. Panneerselvam said. Disapproving the comparison of Tamil Nadu with States such as Maharashtra, Gujarat and Karnataka, the AIADMK leader, who held the portfolio of Finance for much of the 10 years, said that in the devolution scheme of the Fourteenth Finance Commission, it was Tamil Nadu that suffered while the other States benefited. Contending that the overall debt and interest payments were kept under control, Mr Panneerselvam said no State had taken up welfare schemes on the scale that Tamil Nadu had been doing. Maharashtra, Karnataka and Gujarat were not even spending one half of what Tamil Nadu had been incurring annually towards food subsidy — ₹9,500 crore.

On the SOTR’s proportion in Total Revenue Receipts (TRR), he wondered how it could be called being “close to 70 per cent” till 2013-14, when the ratio ranged from 62.33% in 2007-08 to 65.44% in 2009-10. “It was during the Amma’s [Jayalalithaa’s] government that the ratio went up to 72.1% in 2012-13,” Mr. Panneerselvam observed. He said the Budget neither had new schemes for Adi Dravidars and employment generation nor had it spelt out new strategies and approach in crucial sectors or announced measures for revenue mobilisation.