The TVK regime seeks to maximize revenue without raising taxes
The Tamilaga Vettri Kazhagam (TVK)-led regime is trying to mobilize resources without raising taxes and user/consumption charges. It is in the process of identifying areas for resource mobilization.
While the ruling party has promised the people several social measures and freedoms in its manifesto, it is also aware of the fiscal position the government is in. According to unaudited provisional figures available with the office of the Comptroller and Auditor General (C&AG), the revenue shortfall (revenue expenditure in excess of revenue receipts) in 2025-26 was around ₹3,660 crore. 22.8% of the total income for the year.
In terms of fiscal deficit (FD), it is ₹ 1,20,574 crore, which is 3.42% of gross state product (GDP) against the ideal figure of 3%. FD refers to the difference between total expenditure (revenue and capital expenditure including net borrowings and advances) and total income (revenue and capital receipts).
In this context, the new government is considering measures to increase its income. At the same time, those in charge of public finance are under pressure from certain sections of the government pushing for a crop loan waiver as promised in the TVK manifesto, which states that farmers owning up to five acres of land are to be given a complete waiver and for those with more than five acres, a 50% waiver.
As part of steps to improve its revenue, the government plans to plug gaps in natural resource extraction. For example, when it comes to mining or river sand mining, cases of under-accounting are reported to be rampant, leading to significant loss of revenue to the exchequer.
On Prohibition and Excise, the authorities are aware of the shortcomings in the implementation of the Tamil Nadu State Marketing Corporation Limited’s (TASMAC) comprehensive computerization project and want to ensure demand-driven retailing of liquor instead of products promoted by vested interests. It has been pointed out to the government that in the name of implementing Chief Minister C. Joseph Vijay’s directives to close TASMAC retail outlets, field officials have done so indiscriminately.
Another area is the licensing system for ethanol, a plant-based fuel. This fuel helps save foreign exchange by reducing oil imports. The current administration is receptive to the idea of liberalizing the licensing system. However, it is not for methanol, which has been reported to be the main reason behind several hooch tragedies, including one in Kallakurichi in June 2024.
In the area of electricity, the administration plans to tighten the system for purchasing electricity and materials such as coal and transformers. According to an estimate, the government can save ₹10,000 crore annually if the rules are strictly followed.
The government expects all planning authorities across the state to emulate the recent Chennai Metropolitan Development Authority (CMDA) circular on streamlining planning permission processes.
The former policy maker suggests that the graduation certificate system be scrapped as many states do not have such an arrangement. Similarly, the government needs to revisit Sections 37-A and 37-B under which it grants permission to industrial units, commercial establishments and public trusts to hold surplus land. A positive list of reasons can be prepared for liberalizing the operation of sections.
A former Additional Director General of Police says the government should ensure a hassle-free process for obtaining documents such as community certificates, legal heirs certificates and pattas that have a direct impact on the common man. The Chief Minister should be a practical person, regularly and carefully supervise how the public grievance redressal mechanism works, he advises.
Published – 24 May 2026 05:30 IST