A White Paper presented by Tamil Nadu Finance Minister N. Marie Wilson states that the state's own-tax effort has collapsed, with the SOTR-to-GSDP ratio falling to its lowest level in history.
The White Paper, presented on Tuesday, compared Tamil Nadu's performance with peer states Maharashtra, Gujarat and Karnataka. It noted that the SOTR-to-GSDP ratio declined from 5.93% in 2021-22 to 5.45% in 2025-26, while commercial taxes as a share of GSDP fell from 4.53% to 3.89%.
The document attributed the drop across GST, VAT on petroleum and liquor, stamp duty and motor vehicle tax to leakages and systemic corruption. It estimated that the cumulative decline from the 2006-07 peak of 8.94% resulted in about ₹1.23 lakh crore in annual revenue foregone.
Interest payments now consume 34.83% of SOTR, up from 33.83% in 2021-22. Mining revenue remained broadly flat despite a provisional rise to ₹4,433 crore in 2025-26, due to factors including outdated fees and enforcement gaps.
