per capita income of Tamil Nadu in 2021-22 was 1.55 lakh per annum and it increased to 1.67 lakh per annum. This was 1.67 times and 1.69 times when compared to per capita income of India at 92,583 in 2021-22 and was 98,374 in 2022-23 at constant
The estimated per capita income across the southern state of Tamil Nadu in India stood at around 275 thousand Indian rupees in the financial year 2023. Tamil Nadu is a leading global hub for agri-commodities, metals and minerals. The major minerals mined in Tamil Nadu are limestone, bauxite, gypsum, lignite (brown coal), magnesite, and iron ore. Tamil Nadu is the second wealthiest state by GDP and is the most industrialised state in India. As an overview, India's per capita net national income or NNI was around Rs. 98,374 in 2022-23. Per capita income is the mean income computed for every man, woman, and child in a particular group including those living in group quarters. It is derived by dividing the aggregate income of a particular group by the total population in that group. This measure is rounded to the nearest whole dollar. Is TN really a golden state? There is a say “poy sonna vaaykku bhojanam kidaikadhu ( lied mouth will not get the food) TN lied and also blames central KR IRS 13424 ---------- Forwarded message --------- From: Rangarajan T.N.C. <[email protected]> Date: Sat, 13 Apr 2024 at 00:18 Subject: Fw: Article by my colleague To: ----- Forwarded message ----- *From:* Sekar Kumaraswamy <[email protected]> TAX AND FUNDS ALLOCATION - “ DOES THE SOUTH WANE AND NORTH BLOAT ——————————————————————— Famous words of the late Annadurai, the ‘ erudite’ ( Arignar) Anna , the founder of DMK. “ தெற்கு தேய்கிறது , வடக்கு வளர்கிறது”. Literally meaning that the south is waning and the north is bloating . The south is discriminated and the north is favoured is the imputation. . In CNA s shortsighted view the SOUTH is all that is below the Vindhyas ( viz the 4 states) , and those above it, including the impoverished north east , is the NORTH. CNA had no fraternal feeling for all those in this NORTH who did not share common linguistic identity with those in the Ganges belt . That concept was a tapered and rehashed version of the core divisive thought of DMK which it had to renounce, its original claim of Dravida Nadu , an independent and sovereign south India, not just Tamil Nadu . Don’t bother that these four states were as divergent interse as they were with the rest of the country . It did not cut reasoning . He simply saw the other three as vassal states of Tamil Nadu , as their languages were believed to have mothered by Tamil . So they naturally form part of a dream Dravida Nadu on a pre historical pan Dravidian identity, according to his wisdom. So the luny tunes of discrimination are not of recent origin but one we have constantly heard for the last 75 years. It becomes shriller each time DMK sees a threat to its rule .In recent times after the US educated PTR became FM, it got muscular traction with data being granularly taken down to” 28 paise return for every 1 rupee paid as taxes. “ type of argument and contrasting it with Bihar and UP which get more than 1. The govt and FM have responded with one dominant reasoning. All devolution of taxes are as per Finance commission recommendations. No scope for GOI to unilaterally change the allocation mode. It certainly nullifies the argument that the devolution is driven by an adhoc and capricious method. It is based consistently on a time honoured system . Accepted . Does it however address the issue that the devolution formula itself is not pregnant with parameters that favour one state more and , what is more , reward inefficiency . So the devolution in its entirety needs to be looked whether there is inequity in the formula itself. Before it is attempted , recap of some basic postulates and facts. @ Taxes are collected by both the centre and the state. States taxes go entirely to the respective state. Devolution concept applies only to the central pool of taxes. To be fair to NDA , since 2014 the share of states has increased by a very significant 10 to 42% . @ This allocation is determined by a constitutional body , the finance commission . Setup once in 5 years , it comes out with the recommendations on the structure , after extensive discussions with many including states, and is operative for the next 5 years. These recommendations identify first the quantum ( say 30 or 42%) that is to be earmarked for distribution and once the pool is identified , it prescribes a formula for distribution among states based on a weightage . Originally it was entirely population based. So states like UP got much more based on population weight itself . Over the years this got evolved where the weightage for population got reduced substantially and rewards for efficiency and , income variations, were added on . The present formula is Population 15% Area. 15% Forests Ecology 10% Demography. 12.5 % Taxation efforts. 2.5 % Income Variance . 45% @ The weightage given to income variance, the difference between mean per capita income of the country and that of the state carries the heaviest load. So population in absolute terms is gradually yielding to the income composition. Looking objectively some states like Haryana Which are less populated but relatively rich suffer the most. @ whether the tax collections accounted by each state can be considered as appertaining and exclusive to that of that states’ alone? No. A business unit based in the state having a pan indian operations collects taxes from the whole country based on its sales and remits it through its central account at the state where it is located. Karnataka which has many leading PSUs on books appears to pay more but in reality it’s corpus is that of the whole nation. @ In Unified country with complete fungibility of labour , capital and resources, the economic output of a state is not entirely of the state alone and includes that of migrant capital, labour and levy uniform resources . Take steel , coal and oil. None of the states other than Bihar , JHARKAND , Orissa can claim any of the above raw material resources . But for industry they are critical. Freight being a distance variable has to be logically can not be uniform . In enforcing freight equalisation and uniformity in rates throughout the country, the differential freight was absorbed by producers . The opportunity loss in GDP was a humongous amount forsaken by these states. If they claim it today from an historical cumulative amount from all consumers in other states , it will lead to a financial cripple. If these dravidians were incharge of these states , I can take a bet that they will go on shrill tunes on the discrimination. @ What does the central govt do with its 58 % . Plus all those surcharges on it , customs duty etc. which are not in divisible pool.It has a huge responsibility of the entire country’s administration , security, defence and capital investment and gross capital formation for roads , ports, airports, PSUs, infrastructure etc. Centre has no exclusive geographic domain outside the states and the investment made in an airport at BLORE coming from centre is actually an allocation of the state. Not part of devolution. Has any notional allocation has been made ? . Take social sector deployment. Ten crore gas connections, millions of houses , water connectivity, power plants, feeding 80 crore for 3 years now. Here again allocations notionally to states have to be reckoned but not done to get an idea of what is returned. @ Over and above this devolutions , funds are released on designated projects like MNREGA, newly accepted projects like metro , and for calamity under both state calamity fund and national calamity besides from PM national relief fund. So in substance , the contribution of the state is not entirely apportionable to the state nor the full real allocations are captured. So the entire data that is flashed is incomplete and a fractured view and not reflective of the whole picture. There is another interesting fact which seem to have missed everybody’s attention. The flow of monetary resources from organised but non govt sector. Best illustration is that of our TN s credit deposit ratio. This represents how much banks have lent in the state vis a vis what they have gathered as deposit. It is not difficult to perceive that a bank can only lend a portion of its deposits quantum . Normally between 65 to 70% . Others need to be allocated to reserves like CRR and SLR. Can any body guess what is TNs , consistently, decades after decade. It is above 100 %! Now 112%. What is that of UP ? It is about 55%. It was languishing at 45 till last 10 years . Bihar ? 52% . Panipuri sellers and menial labourers from Bihar seem to funding TN . Dayanidhi Maran who spoke disparagingly about Biharis may note. His SpiceJet debt has not been funded entirely by his brethren from TN . This is an advantage on key element of an economic factor of production conveniently forgotten What does these states themselves do on the constitutionally mandated state SFC recommendations to their municipal bodies ? I have a doubt whether they distribute at all in regular intervals in conformity of the laws . Just as centre is required to do vis a vis states . As per the constitutional amendment no 74. a system of devolution is mandated based on population . What a metropolitan Blore contributes is not spent on blore only , but a part of it in a backward dist like Gulbarga. What If the mahanagarapalik sees blood and claim that what is contributed by Bangalore metro is to be spent on Bangalore only. You can absurdly insist that is contributed by the high society Lavelle Road area is not spent in kalsipalyam. Not that it will improve bangalores civic standards but certainly open up more scope for misappropriation. So this whole demand that a region should get back 100 % of its total tax contribution is basically flawed financially and reveals an avaricious self centricity , greed and selfishness of the shameful kind which is not implementable even in a micro version of governance.Even in a family , some one weak gets more care. Which are the states voluble in this crusade? All have one common factor. Their recent huge social commitments , like the freebies, inconsistent with their budget .Or have mismanagement. Why this problem should snowball into a major issue now . The load of these freebies which they are unable to bear. The irony is that the GOIs social benefits budget has increased manifold , expenditures which should have borne by state govts to a major extent. Still political adventurism has imposed additional and economically untenable claims on the budget. Is there no scope for better method. Certainly there is. The weightage of population that has come down significantly over these 60 years. So are factors like demography which are efficiency related But the weightage of 45 % on income disparity needs to be fine tuned. But that should emerge out dispassionate , depolitical assessment . Central to this endeavour is a belief that the less endowed in income need a compassionate hand anyway. A gradually tapered allocation with more discretionary allocation on empowerment outside the devolution framework needs to worked out. It is not beyond solution . We need mind and national disposition to achieve it. One advice to TN and regrettably in recent times , Karnataka. Please be aware that you have immensely benefited by being an entity in this common nation identity. I read somewhere that the great Dr Rammanohar Lohia , the socialist, was pointed out the losses that units in Bihar , Orissa and West Bengal suffer in this freight equalisation. He just dismissed it with disdain saying like a true nationalist that what is the loss of Bihar etc is actually gain of a fellow Indian in south. That was the enlightened view of a nationalist , an acerbic critic of the govt and an adversary of the govt, when resources and income were compressed in national interest and a legitimate income was forgone by some state which was poor . That is national interest . Siddaramaiah is of socialist origin and he can not be uninfluenced by the views of the father of such movement in India. Hope some good sense will prevail. -- You received this message because you are subscribed to the Google Groups "Thatha_Patty" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To view this discussion on the web visit https://groups.google.com/d/msgid/thatha_patty/CAL5XZooUbKgeMMdBmT5gNNPDMPGUargCd-ZgLt-zHprKaR4bmQ%40mail.gmail.com.
