Chennai: Tamil Nadu government has constituted a high-level Revenue Augmentation Committee under the chairmanship of economist Montek Singh Ahluwalia, former Deputy Chairman of the Planning Commission.
The panel has been tasked with recommending measures for the sustainable augmentation of the state’s tax and non-tax revenues, besides measures to improve compliance, plug leakages, rationalise fees and exemptions, and identify new and under-tapped sources of revenue.
The move comes against the backdrop of a White Paper on Tamil Nadu’s Fiscal Management released by the TVK-led government on 16 June.
Commenting on the fiscal deficit in Tamil Nadu, Ahluwalia told ThePrint, “It is not just Tamil Nadu. All states have a very difficult fiscal situation and are having a challenging time.
“It is premature to determine what measures can be taken in the context of Tamil Nadu’s financial situation but priorities would be decided when the committee meets within the period of three months.”
Presented by Finance Minister N. Marie Wilson, the White Paper had painted a challenging picture of the state’s public finances for the period FY2021-22 to FY2025-26. It noted that outstanding liabilities nearly doubled from Rs 5.13 lakh crore on 1 April, 2021, to approximately Rs 10 lakh crore by 31 March, 2026, growing at a compound annual growth rate of 14.3 per cent.
The White Paper also revealed that the debt-to-GSDP ratio of Tamil Nadu stood at a consistently elevated 28.3 percent, higher than peer states Karnataka, Maharashtra and Gujarat. At the same time, the state’s own-tax revenue to GSDP ratio declined from 5.93 percent to 5.45 percent, the lowest in decades and the steepest drop among comparable states.
Montek Singh Ahluwalia told ThePrint that the details of the White Paper would be considered when the committee meets to decide on measures to be undertaken to increase and improve the state’s revenue sources.
The TVK-led Tamil Nadu government has emphasised the need to align the growth of revenue with the growth of the economy, augment and sustain the resource base, strengthen fiscal self-reliance, and create the fiscal space required to meet developmental commitments.
Other members of the committee include Dr K.P. Krishnan, retired IAS officer and former IEPF Chair Professor of Economics at the National Council of Applied Economic Research (NAER), Arbind Modi, tax policy expert, Najib Shah, former Chairman of the Central Board of Excise and Customs, M.A. Siddique, Additional Chief Secretary to the state government (Finance department); and Dr M. Suresh Babu, director of the Madras Institute of Development Studies.
The panel’s scope of responsibilities will also include PSU dividends, land and asset monetisation, and improved user charges.
The committee is also expected to highlight administrative inefficiencies in revenue-collecting departments, including systemic changes in administration and greater use of technology.
Even as Tamil Nadu is bringing in various changes to TASMAC and functioning of the bars in the state, the committee will also recommend measures to increase revenue from alcohol through changes in regulation and ways of fine-tuning the state’s liquor policy.
It has been empowered to call for any records, returns, data or reports from government departments, public sector undertakings, boards or revenue-collecting agencies and may require officers to appear before it.
(Edited by Amrtansh Arora)
Also Read: Tamil Nadu ranks third in NITI Aayog’s Investment Friendliness Index 2026, but challenges remain