TN Sets Up Revenue Panel Headed By Montek Singh Ahluwalia To Suggest Ways To Boost Finances

Chennai: The Tamil Nadu government has constituted a six-member Revenue Augmentation Committee, headed by economist and former Planning Commission Deputy Chairman Montek Singh Ahluwalia, to recommend measures for the sustainable augmentation of the State's tax and non-tax revenues.

According to a Government Order issued by the Finance Department on July 24, the committee has been tasked with suggesting ways to improve compliance, plug revenue leakages, rationalise tax rates, fees and exemptions, and identify new and under-tapped sources of revenue to strengthen the State's fiscal self-reliance.

The government said the decision follows the White Paper on Fiscal Management of Tamil Nadu released in June 2026, which attributed the decline in major tax revenues, including GST, VAT, excise, mining and mineral revenues, largely to administrative choices, leakages and corruption rather than an economic slowdown.

The order noted that Tamil Nadu's State Own Tax Revenue (SOTR)-to-GSDP ratio had fallen to 5.45% in 2025-26, the lowest in two decades, resulting in an estimated annual revenue foregone of about ₹1.23 lakh crore. It also said the decline was visible across major revenue heads, including GST, VAT on petroleum products, State Excise, stamp duty and motor vehicle tax.

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Besides Ahluwalia, the committee comprises former Minister K.P. Krishnan, Arbind Modi, former CBEC Chairman Najib Shah, Additional Chief Secretary (Finance) M.A. Siddique, and M. Suresh Babu, Director of the Madras Institute of Development Studies.

The committee has been asked to recommend policy and administrative measures to improve revenue buoyancy and efficiency, examine non-tax revenue avenues such as PSU dividends, land and asset monetisation, and user charges, besides suggesting systemic changes to curb tax evasion and administrative inefficiencies. It has also been specifically tasked with recommending measures to enhance revenue from alcohol for human consumption through changes in regulation and taxation policy.

The panel has been empowered to seek records and data from government departments, public sector undertakings and revenue-collecting agencies, and may constitute sub-groups for specific sectors such as Commercial Taxes, Registration, State Excise/TASMAC, Mines and Minerals, Motor Vehicles and non-tax revenues.

The committee has been given three months to submit its report and recommendations to the government.