Tamil Nadu Finance Minister Palanivel Thiaga Rajan on Thursday said the State has managed to reduce revenue and fiscal deficits and achieve growth despite keeping inflation in control. Speaking to the media here, he called it a "perfect trifecta" and said the job of the finance minister is to balance these three.

"We should reduce spending in a way that would reduce the burden on poor people and grow revenue. State's Own Tax Revenue (SOTR) has increased by 55%, and non-tax revenue is up by 75% in the first quarter of the current financial year (Q1 FY23)," he remarked. Rajan attributed the revenue growth to responsible fiscal management and optimised spending, and blamed the previous AIADMK regime for mismanagement from 2016 to 2019.

He added, "Food inflation in Tamil Nadu is one of the lowest in the country and it is because the cost of food is much lower and rise in prices is much slower. It's not a coincidence that our spending in the public distribution system (PDS) has gone up almost 100% in the last two years. That has helped us contain inflation."

Contrary to the Union government's claim, Rajan said the increase in public welfare schemes has resulted in growth. "Because we're doing that, we get good growth, because of that, we get a better society and more participation of women in the workforce, and higher per-capita productivity," he reasoned.

He hit out at the Union government for telling States to reduce public spending such as PDS without any constitutional mandate, and said this has affected the State's fiscal autonomy. He also commented that an increase in GST collection doesn't indicate economic growth. "GST collections have gone up by 37% (YoY) and direct tax collection has increased by 23%. But these nominal numbers will go up naturally and it is not adjusted for inflation," he observed. He added that due to inflation, the rise in population, and various other factors, monthly GST collections are increasing.

Media: New Indian Express