White Paper addresses adverse impact of ‘revenue collapse’ on people of Tamil Nadu
GS3Economy · S&T · Environment · Security· Fiscal policy, budget & taxation (GST)· Mains·
Why in news
The Tamil Nadu government released a White Paper highlighting a 'revenue collapse' and the resulting fiscal strain on the state's ability to fund welfare and infrastructure.
Background
The White Paper identifies a declining tax-to-GSDP ratio as a primary driver of fiscal stress. It identifies three core impacts: necessity of borrowing for new programs, diminished fiscal autonomy, and an increasing debt burden on future generations.
Facts for Prelims
- FactTax-to-GSDP ratio: A key indicator of a state's fiscal health and ability to fund public services without excessive borrowing.
- BodyWhite Paper: A formal government document outlining policy goals, problems, and proposed solutions for a specific issue.
- FactCapital Expenditure: Spending on physical assets like roads and power plants, which the paper suggests must be balanced against welfare schemes.
For Mains
Q. Analyze the fiscal challenges faced by Indian states in balancing welfare expenditures with capital investment amidst declining tax-to-GSDP ratios.
Dimensions to cover in your answer
- Fiscal autonomy erosion: Increasing reliance on market borrowings to fund recurring welfare expenditures vs. infrastructure development.
- Intergenerational equity: The long-term impact of current debt accumulation on the fiscal space available for future generations.
- Revenue leakage: Systemic corruption in state revenue departments hindering the collection of internal resources.
Keywords: Fiscal Autonomy · Tax-to-GSDP Ratio · Capital Expenditure · Debt Sustainability · Revenue Leakage
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This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.