Reclaiming Tamil Nadu’s fiscal autonomy and sustaining its growth model
The Government of Tamil Nadu’s white paper is a comprehensive analysis of the State’s financial status and economic conditions. Detailed like the white paper prepared by the DMK in 2021, the TVK’s 120-page document begins with an important line: ‘it is neither an exercise in retrospective blame nor a political statement’. In that spirit, this is a genuine exercise. It indeed offers an honest account of what went wrong with tax collection: a shrinking base and leakages embedded in both revenue collection and expenditure patterns. While its diagnosis is rigorous, what is not clear, however, is how the government is going to fix the leakages and manoeuvre the welfare that it has promised during its election campaign. The white paper lays bare the structural weaknesses facing Tamil Nadu’s economy and the possible course correction which in that sense has a lot more continuity with the earlier one submitted by the DMK. Both literally state that “the current levels of fiscal deficit are unsustainable primarily because a substantial portion of the fiscal deficit is simply to …
