TN’s arrears in revenue worth Rs 36,499 crore, finds CAG

CHENNAI: The State government has arrears in revenue worth Rs 36,499 crore, which is yet to be recovered, according to a report by Comptroller and Auditor General (CAG). As much as 56.93 per cent of the arrears is under recovery process while 38.95 per cent is under litigation and action has been initiated in respect of the remaining 1.42 per cent.

The highest amount of pending revenue worth Rs 30,321 crore pertains to the Sales Tax and Value Added Tax. While the recovery is under various stages, Rs 10,603 crore worth of revenue has been stayed by the judicial  authorities, the report stated.

“The arrears as on March 31, 2019, represented 34.54 per cent of State’s own taxes. Effective action to recover these taxes on time would help reduce the revenue deficit of the State,” the report added. Meanwhile, the report stated that the revenue deficit increased from Rs 6,408 crore in 2014-15, which is 0.6 per cent of GSDP to Rs 23,459 crore (1.41 per cent of GSDP) in 2018-19.

During 2018-19, though the State contained its revenue deficit within the target proposed in the Medium Term Fiscal Policy (MTFP) -- Rs 25,335 crore, it failed to achieve the target proposed in the budget (Rs 17,491 crore) and exceeded the target proposed in the budget estimate by 34.12 per cent.

The report said that the fiscal deficit of Rs 39,840 crore during 2017-18, increased to Rs 47,335 crore in 2018-19. However, the State could contain the fiscal deficit at 2.84 per cent of GSDP, well within the ceiling of 3 per cent of GDP as envisaged under the Tamil Nadu Fiscal Responsibility Act, 2003 and 14th finance commission, but marginally exceeded the target proposed in the budget (2.97 per cent).

The high fiscal deficit of Rs 47,335 crore as against the capital expenditure of only Rs 24,311 crore, is indicative of the fact that the borrowing during the year was utilised for financing the revenue expenditure, thereby according lower priority to capital expenditure, the report stated.

Meanwhile, the subsidies consumed 10.89 per cent of the State’s revenue receipts, according to the report. The expenditure on subsidies increased sharply from Rs 15,230 crore during 2017-18 to Rs 18,922 crore in 2018-19. Concerning percentage of revenue expenditure, there was an increase from 9.07 in 2017-18 to 9.60 in 2018-19.

Implicit subsidies like marriage assistance, maternity assistance, free laptops and uniforms, have come down from Rs 6,156 crore in 2015-16 to Rs 4,198 crore in 2018-19, the report stated. The report also stated that the taxes subsumed into GST was Rs 29,786.36 crore during the year 2015-16. 

The revenue to be protected for any year was to be calculated by applying a growth rate of 14 per cent per annum. In 2018-19, the revenue through GST was projected at Rs 44,129.80 crore. However, the receipt was for Rs 41,684 crore. This worked out to a growth of 7.86 per cent as against the projected growth of 14 per cent, the report added.