Tamil Nadu Revenue Projections 2014-15 Goes Awry!

Update. 01-Jan-2015, Savage USA

I have been monitoring to see the Tamil Nadu government's mid-year 2014-15 financial update. I have not seen an official report, although I searched google extensively today to see any publication on it. I could not find anything. However, I saw a report on Vikatan.com website. It had given some financial figures for the current year 2014-15. And I update this blog as: For the current year 2014-15, the Tamil Nadu government achieved Revenue collections for the first 6 monts ending Sep 2014 as:

1. Total revenue reached Rs. 37,056 crores only at the end of Q2,  as against the total annual budgeted Revenue of Rs. 91,835 crore.
2. Commercial Tax growth was only 1.48% during first half of current year.
3. Excise tax growth for the first 6 months only at 10.87% as against 28% budgeted growth.
4. Registrations tax collections ( stamp duty on property sales etc) had a Negative growth of -2.45%.
5. Tax collection from Vehicle taxes are also substancially lower at 7% against 39%.

6. Cental Government collections are also much lower than forecast. Tamil Nadu will not receive the full budgeted Cental share of tax Rs. 19,014 Crores cor current year!.

Let's wait and see how Mr. Panneerselvam handle this dire situation in Tamil Nadu Finances this year!..


12-Dec-2014., Savage, USA
I had heavily criticized the Tamil Nadu budget early this year. Now, I reviewed that Tamil Nadu budget's estimates if they are being met or not!. First, the Revenue forecast went awry. Tamil Nadu is scrambling to meet the Revenue projections with shocking unpublished, non-transparent, hypo-critic measures. Few months back  Tamil Nadu government secretly increased the liquor prices as much as 40% and an average increase of 17% on all brands of liquors sold at TASMAC. Now, the TN Electricity Regulator Agency, which had the Tariff revision in cold storage before Elections, brought the Tariff Revision abruptly with 15% increase to Reduce the Losses for the erstwhile TNEB(TANGEDCO). Remember the Milk prices were revised mid year, not in Budget!. Because the revenue dried up, Tamil Nadu reduced the provisions to MGNREGA  by as much as 70% this year in some districts!.

Tamil Nadu PSUs made a net Loss of Rs. 52,088 crore during the past 6 years!

The people of Tamil Nadu, are vested with ownership of 63 (TN state) PSU corporations, run by Govt of Tamil Nadu.

The Loss of operating the PSUs by the Tamil Nadu government exceeded Rs 13,000 Crore at the end the Year 2013. In the 6 years from 2007-08 to 2012-13 Total Losses ==> Rs. 52,088 Crore.

Why would Tamil Nadu governtment after having lost Rs. 52,088 crore, the people Tax money, still wants open up new businesses such as Amma Restaurant, Amma Pharmacy etc? 

Campaign:: Justice for Citizens of Tamil Nadu!

This Campaign is started for Justice for Tamil Nadu people. Just a 12-13 Lakh employees of Tamil Nadu government staff taking 54%(Rs 54,000 crore) of the pie of Tamil Nadu government's Revenue(Rs.99,900 crore).  Remaining 46% of the pie is only spent for 7 crore population. This is a colossal discrimination!!. Please support. Throw your ideas!. This monumental skewed government budget was in 15 years of making, by two major parties of Tamil Nadu!. Not a single state in USA spends more than 4-5% for Wage bill of the state. Additionally to know , Gujarat is spending only 16% for salaries and pensions of govt staff. I am asking if the Government directs 54% to the servants of governed , from the powers given by governed and the govt spends only 46% for the welfare of the governed who gave the powers to the govt for governing, isn't this colossal unfairness and discrimination? In democratic republics, most countries spend about 5% for the government to govern citizens. My question is how we got into this situation. And how many in Tamil Nadu are aware of?. And what's the remedy?. My campaign's first purpose is creating awareness. Please join this debate!.

5th Sep 2014:
Researching on how much the TN Government was spending for Govt staff, when Kamaraj was the CM and one of the biggest Project of building the Bhavani Sagar Reservoir was going on.........if any any one has data please pass it on.....

6th Sep 2014:
The central government spends only less than 6% of its Revenue to run the Govt. That is, the govt salaries and pensions are less than 6%.  Now, you wonder why TN spends 54% of Revenue to run the TN state government?

6th Sep 2014:
Asked the Tamil Nadu BJP president Tamilisai Soundararajan to give me time to discuss this matter over phone with her. I sent her a Facebook message asking her to call me with my phone number. 

6th Sep 2014:
Posted a message to Mr. Ravishankar Prasad's facebook page, mentioning that the Fiscal Responsibility and Budget Management Act 2003 needs an amendment. This act only addressed the fiscal deficit crisis of 2003. But, now the new crisis is State Governments are spending too much of budget money to just run the Government itself. TN govt spending 54% of its Revenue just run the govt is shocking, unacceptable for a democratic state. This would make FDIs disappear from Tamil Nadu. Can not be tolerated. It needs immediate attention from Supreme Court and Central Government!. So, the 2003 FRBM act needs immediate amendment before the next fiscal begins in April 2015. 

How to fix Tamil Nadu Govt Finances.

The budget documents are prepared in such a way it deceives even educated auditors. Even they don't know the whole truth behind the Tamil Nadu budget!. As I have explained earlier, the TN Govt is spending nearly 50% of its revenue just for about 12 Lakh employees during the last 4-5 years. Only remaining 50% is spent for the 7 crore population!. The Govt. employees have strong unions. Its very difficult to bring down their salaries and perks right away. Only a carrot-stick approach can help. A strong political will is required to bring reforms in Govt Service Responsibility Act to offer services to people on a pre-determined period, expressed in days, for all Govt services. Unions, will reject such rules. Downsizing the staff, and improving performance is another way to bring down Employee expenses. Introduction of performance based salaries should not be ruled out for Govt. employees. The govt expenses for employees should be brought below 10% of Govt's revenue on long term basis. In short term, it should be at least brought down to 25% in the next 5 years. If not, Tamil Nadu can not compete with states like Gujarat, where Govt expenses for employees were only 17% in 2013-14 budget. 

Tamil Nadu People deprived of their fair share from the Govt budget!

Every person in Tamil Nadu is paying tax to the Tamil Nadu government when they use soap, tooth paste, cloths, cigarette, petrol etc. Almost every family is paying tax. This year TN govt collects taxes from Tamil Nadu people, a total budgeted amount Rs. 99,919 Crore. How much it spent for the Employees who offer the Services to the people of Tamil Nadu, to keep the Law&Order , to issue various certificates, register documents, etc? That amount as per budget is Rs 51,000 Crore. There is no other government in anywhere in the world, paying 51% of Revenue to its employees. Do you still think Tamil Nadu people need to pay bribes to get the works done by these employees?  Or kept surrendered to them!? Half of the Tax the tamil nadu people pay each year is given out as wages and pensions. In addition, the bribes are second taxes on the Tamil Nadu people? Is this not surrender?    Gujarat only spends 16% of its Revenue for Govt employee salaries and pensions!!!! Gujarat, is the way to go!.

During Kamaraj period(1962-63),  the Govt staff salaries and pensions were only around 7% of revenue. Kamaraj built Bhavani Sagar Reservoir in record time and below its budget amount.

If their salaries were not increased by 10% of  their base salary, the state(people) will have  Rs 10, 000 crore each year for next 10 years.  This would amount to Rs. 1 Lakh crore. It could used for keeping Tamil Nadu clean, water for more districts and better Roads and Bridges, more infrastructure etc and make Tamil Nadu a world class state. Only if all Tamil people come together!?

Tamil Nadu people are deprived of their due share from the Govt Revenue. 12-13 Lakhs of govt staff taking 50% of revenue of State Govt that was generated from 7 crore population and only remaining 49% or so, is left for the 7 crore Population.  7 Crore people are completely ill informed of this. Spin campaigns such as free Grinder, Mixie and Amma pharmacy and Amma canteen etc are taking the Media space. No media and opposition party had studied and analyzed this issue to inform Tamil Nadu people.

Source: 1. Budget documents of TN Govt website: http://www.tnbudget.tn.gov.in/ . 2. Gujarat Govt Budget documents

Authentic Truth behind Freedom of India.

On a historic day, July 5th 1945, UK general elections held. Historians still struggling to explain how could the war veteran Winston Churchill lost this election, almost the winning of the War is only a few weeks away.  Historians blamed it on anti-incumbency due to unemployment and general frustration after 6 years of World War II. Another perspective was that British people believed Labor party is better positioned for reconstruction of UK after WWII,  than Conservative party.
Anyhow, the Labor Party leader Clement Attlee assumes office of the Prime Minister of United Kingdom, on 26th July 1945.  

In less than a year after taking over as PM, Mr Attlee announces the UK cabinet's decision, to free India, on 16th March 1946.   Mr Attlee literally decided washing his hands off of largest British colony. Mr Attlee had no interest on the future of India unlike Mr. Churchill. Destiny began on that day, 16th March 1946.   

Tamil Nadu 2014-15 Budget documents finally published on net.

I have waited for over 6 months to see detailed documents of Tamil Nadu budget on the net. The government quoted a silly reason that Election 2014 delayed the Budget presentation and subsequent delay in posting documents on net, on my RTI inquiry.

In the Year 2014-15, the state's Revenue is projected at Rs. 99,919 Crores. This is much less than what they projected 2 years back in advance projections as Rs. 108,545 Crores. The budget has not released the Salaries and Pensions for Government employees for 2014-15. However, it has revised it previous estimate of Salaries and Pensions from Rs. 42,000 Crore to Rs. 49,600 Crore, for the year 2013-14. This is a big surprise and astounding, that why would a fixed spending of Salaries would go up that much increase!. I do estimate the Salaries and Pensions of Govt for its employees,  would be around Rs. 54,000 Crore. I had mentioned earlier in my previous blogs that the ration of Salaries and Pensions reached 49% to the Government's Revenue Income, before borrowings and Central provisions. Let's take a look at the ration of Salaries&Pensions to Revenue, this year 2014-15 at Rs. 54, 000 Crore to Rs. 99,919 Crore. The percentage is at 54%.  Oh, My God!!!.   Why would the People of Tamil Nadu not informed that 54% of Govt's income is spent for Govt. Employees, compared to 49% last year!!!!.  TN govt employs about 12 Lakh people. Govt spends 54% for 12 Lakhs. Remaining 46% for the 7 Crore population! This is the Himalayan Insanity! 

2013-14 Tamil Nadu Budget falling into Niagara Falls!?

The Revised budget presented on the Govt website www.tnbudget.tn.gov.in has the following details for the year 2013-14.

The Revenue Receipts( Income of the State before Loans){A} stands at Rs 1,18,579 Crores. Out this, the State own revenue ( from the sales taxes, other taxes, stamp duty etc) is at Rs.86,065. Share from Central Taxes is Rs. 17,285 Crore. And state's non-tax revenue is Rs.  6,765.

Now let us look at the Loans the state government borrows. The total borrowings{B} for the year 2013-14 is Rs.  29,439 Crores.
Now let us look at major expenditures of the Government. Revenue Expenditure is Rs 1,17,915 Crore and Capital Expenditure is Rs 22,505 Crore. Total Expenditure{C} is Rs 1,40,420 Crore.
The net Deficit is {C} - {A} [  Rs. 1,40,420 Crore - Rs. 1,18,579 Crore.] == Rs 21, 841 Crore.

So, our calculated Deficit is only Rs. 21, 841 crores. But, the govt states in its budget it borrows{B} Rs 29,439 Crore. That means, is the Govt borrowing Rs. 7598 crores more than what it needs? Or is the govt not showing some expenditure to the tune of Rs. 7598?

I was lost at this Government's budget numbers for a moment. Then I went back to look at few other documents.  Bingo, that's amount Government re-paid Loan principal amount. The govt borrowed Rs. 29,439 crore. It repaid loan amount Rs. 7598 Crore. Do you know how much the govt paid interest for this year? Rs. 14,230 Crore interest payments.

But, why would the Government states in 'Budget at Glance' document, the Government's deficit as only Rs. 1,796 Crores? When the Government borrowed actually Rs. 29, 439 crore, why are they showing the Deficit as only Rs. 1796 Crore?

Is the Budget of the government really falling into Niagara Falls? 

India Budget 2013-14. How much people know the depth of Budget?

I have always had interest to analyze the Central Government Budgets and Tamil Nadu Govt budgets in unique ways, than what the traditional Media do during Budget season. In the recent times, I would say since 1991, Budgets are viewed more aggressively than any times in the history of India. Many stakeholders have come to play role during Budget season. Media, Lobby groups, Corporate Houses, non-profit organizations like CII, NASSCOM etc, Political Parties, and many others, start demanding their selfish expectations right around the Budget times.

When I want see how many are actually, writing for the sake of the Nation, I only see very few articles. So many of the demands that the Media writes about is:  Seeking Income Tax slab increase. Because its a major selling point for Media. Most salary income people read both local language and English news papers and watch news TV as well.

During the past 20 years since 1991, I have not seen a single story or article in the Media demanding the Income Tax tiers/slabs be tied to Inflation Index of each year, as how much it would be increased or decreased.  And free the Finance Minister from this exercise and save his time each year.  Amend the Income Tax acts to make this change and CBDT can issue circular each year adjusting the Income Tax slabs of that year, adjusted against the Inflation Index of previous year!.

Is this not do-able? Wouldn't this be a direct path to a Developing nation? What good the Harvard educateds are doing to India, when they couldn't even achieve this small progress??