Ahluwalia-led Committee Aims to Boost Tax Administration in Tamil Nadu

Why in news

A committee led by Montek Singh Ahluwalia was formed to address the declining share of own-tax revenue in Tamil Nadu's GDP and improve fiscal sustainability.

Background

The Revenue Augmentation Committee aims to identify new revenue sources and address tax leakages. Tamil Nadu's own-tax revenue share as a percentage of GDP is projected to drop from 5.93% in 2021-22 to 5.45% in 2025-26.

Facts for Prelims

• FactTamil Nadu's own-tax revenue share as a % of GDP: 5.93% (2021-22) to 5.45% (2025-26)
• BodyRevenue Augmentation Committee: tasked with improving tax administration and expenditure efficiency

For Mains

Q. Discuss the challenges faced by state governments in enhancing own-tax revenue and the importance of fiscal sustainability in achieving long-term economic growth.

Dimensions to cover in your answer

• fiscal deficit management
• tax compliance and leakages
• revenue diversification
• expenditure efficiency

Keywords: fiscal sustainability · revenue augmentation · tax administration · leakage reduction · expenditure efficiency

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