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CHENNAI: Bad fiscal planning and shabby tax collections have made TN notorious on the economic front. Tamil Nadu recorded the highest revenue deficit of '15,850 crore in India in 2016-17. The state's revenue deficit has soared 885% in the last five years as the freebie culture, coupled with poor tax collections due to real estate glut, continues to drain the treasury.

From a revenue surplus of `1,760 crore in 2012-13, the state saw its deficit go down to '1,790 crore in 2013-14. It increased 258% in 2014-15; 47% in 2015-16 and 67% in 2016-17. “It is time that political parties start taking tough decisions. For instance, freebies like free power has made state-owned power-distribution entity TNEB bleed; from a high revenuegenerating company it is now heavily debt-ridden. Populism should not be at the cost of pragmatism,“ says P Ravi chandran, chairman, southern region, CII .

Another alarming number is the total deficit. According to RBI, Tamil Nadu has nearly doubled its gross fiscal deficit to '40,500 crore in 201617 in the last two years. It is also true that its economic size has grown. The state now ranks third in the coun try, just behind Uttar Pradesh and Ra jasthan, in terms of gross fiscal deficit. But, unlike Uttar Pradesh, whch has managed to lower its fiscal deficit to `49,960 crore from `64,330 crore over the last year, Tamil Nadu's fiscal deficit has increased by 54% from `32,300 crore in 2014-15.

“The state's finances are in disarray. They need to do a rethink; one's expenditure cannot always be higher than one's income. We cannot infinitely keep borrowing. Tamil Nadu is the third-largest revenue generating state in India in terms of GDP and yet we are only seeing our debt shoot up. The government has to take stringent measures to plug the holes, if we are seeking a turnaround,“ said CII's Ravichandran. Tamil Nadu's debt has also soared by 68% in the last five years.

The state's outstanding liabilities increased to '2.56 lakh crore in 2016-17 from `1.52 lakh crore in 2012-13. This compares to the state's debt of '17,257 crore in 2006-07; showing that liabilities have increased 15 times in the last 10 years.

This is despite the state having a high gross domestic product and high tax revenues. TN's tax revenues have more than doubled to `90,690 crore in the last five years, as has its gross domestic product at `13.38 lakh crore in 2016-17.

