TVK Government's GST Revenue Under Scrutiny, Says Annamalai

Tamil Nadu's GST collection has come under scrutiny after former state BJP president K. Annamalai questioned the TVK government's fiscal management. In a post on X, he said the GST numbers over the last six months raise significant concerns about the state's economy and its revenue mobilisation.

Annamalai said the six-month GST trend points to weaknesses in the state's economic performance and the government's financial priorities. He noted a positive sign in October, when GST revenue rose after a period of decline. However, he said the increase was still under 10 per cent, which he described as insufficient.

The BJP leader said the modest rise after several months of falling collections is a cause for worry, since it does not appear to represent a strong recovery. He added that the figures come even though Tamil Nadu saw its festive season, long school holidays, a rise in tourist arrivals and a notable increase in economic activity.

He asked that the rise in post-settlement revenue not be presented as a justification. He said the comparison is being made between the GST revenue of this year and last year, and that the IGST settlement process is nothing new. Annamalai also pointed to states such as Karnataka, Maharashtra, Gujarat and Haryana, which have economies of comparable size and are continuing to record robust GST growth.

Advising the state government, he urged the TVK administration to focus on the issue and take steps to raise GST revenue. He suggested that monitoring capital expenditure across all departments could be a starting point. He said there is a widespread perception that capital spending in several departments has slowed in the last six months, which breaks the circular economy normally generated by public capital expenditure.

Annamalai further raised concerns about the manufacturing sector. Tamil Nadu ranks first nationally with 15.43 per cent of India's factories, he said. But in terms of gross value added, its contribution is 10.26 per cent, placing the state third in the country. Fifteen years ago, its share of national manufacturing GVA was 10.3 per cent, and there has been no significant change since, even as states that once trailed the state are narrowing the gap.

He concluded that regional imbalance reports prepared by the state planning commission will not automatically solve the state's problems. Such reports, he said, merely reveal where the state currently stands.