An Analysis of Tax Revenue and Non Tax Revenue in Tamil Nadu

Abstract The State Governments maintain law and order, administer justice, build up social and economic infrastructure and ensure a social safety net for the poor. Tamil Nadu has been subsidizing the provision of power, food, health services and nutrition and education with the overall welfare perspective in mind. The Consolidated Fund is the principal head in which resources flow and expenditures are incurred under the Revenue Account and Capital Account of the Fund. There was a turn round in the Revenue Account from deficit to surplus because Revenue Receipts exceeded the Revenue Expenditure during 2011-12. Non-Tax Revenue is comprised of State's Own Non-Tax Revenue and Grants-in-Aid from the Central Government. Grants-in-Aid accounted for 54 percent and State's Own Non-Tax Revenue 46 percent. There was a fall in non-tax revenue during 2009-10 because of the decline in the quantum of grants-in-aid from the Centre as well as the receipts from own non-tax revenue. Among these two components' the decline was more pronounced in grants-in-aid (22.7%) as compared to own non-tax revenue receipts (12%). In the subsequent years, non-tax revenue registered increases ranged between 0.6 percent in 2012-13 to 29.9 percent in 2013-14. The main problem of Tamil Nadu is that the growth rate of Tax Revenues is very slow growth. In the backdrop of sluggish economic growth that witnessed both at all India and in Tamil Nadu, the 12th Five Year Plan as well as Annual Plan had been formulated in the State. All India had an average growth rate of 8 percent during the same period.