Tamil Nadu GST Growth at 3% as Annamalai Targets Vijay Govt

Tamil Nadu’s economic performance under Chief Minister C Joseph Vijay’s TVK Government has come under criticism from former BJP state president K Annamalai and DMK chief MK Stalin, who have raised concerns over slowing GST collections, government spending and the loss of a major Korean investment to Andhra Pradesh.

The criticism follows several months of weak domestic Goods and Services Tax (GST) collections in Tamil Nadu. Although the state recorded growth in October, the increase remained in single digits, well below the national average and the growth reported by several other major states.

Annamalai questioned the government’s fiscal priorities and ability to generate sustainable revenue, while Stalin accused the administration of mishandling investment promotion and allowing projects worth Rs 1,614 crore to move to Andhra Pradesh.

K Annamalai Questions Tamil Nadu’s GST Performance

In a detailed post on X, Annamalai said Tamil Nadu’s GST collection trends over the preceding six months raised serious concerns about the state’s economy and the TVK government’s revenue-generation capacity.

“What makes the single-digit growth, following several months of degrowth, even more concerning is that the recovery appears far from adequate,” Annamalai wrote.

He pointed out that October’s modest recovery came despite the festive season, extended school holidays and increased tourist activity, which he said should have supported economic activity and tax collections.

Official figures show that after modest growth in April, Tamil Nadu’s domestic GST collections contracted year-on-year from May through September. Collections fell 5% in September to Rs 10,188 crore before rising 3% in October to Rs 11,661 crore.

The October performance was significantly below the growth recorded by several other states and the national average.

• Tamil Nadu: 3% GST growth.
• Karnataka: 18% growth.
• Maharashtra: 13% growth.
• Gujarat: 16% growth.
• Haryana: 17% growth.
• National average: 22.9% growth.

Annamalai also rejected arguments based on post-settlement revenue figures, saying comparisons should be made between the corresponding periods of the previous and current years.

“Please do not cite post-settlement revenue growth as an argument, because we are comparing GST revenues from last year and the current year, and IGST settlement was not introduced recently.”

Post-settlement GST refers to the final State GST amount retained by a state after the Centre apportions and settles Integrated GST collected on interstate supplies according to the place of consumption.

MK Stalin Accuses Vijay Government of Losing Korean Investment

DMK president MK Stalin also criticised the TVK government, highlighting Tamil Nadu’s below-average GST growth and the movement of Korean investments worth Rs 1,614 crore to Andhra Pradesh.

In a post on X in Tamil, Stalin said the state’s economic progress had been undermined under the new administration. He accused the government of allowing investment promotion agency Guidance Tamil Nadu to lose its earlier standing because of what he described as personal egos.

“One really ought to learn from these people how to shift into reverse gear so rapidly across every single sector,” Stalin said.

Targeting Chief Minister C Joseph Vijay, Stalin questioned the administration’s awareness of developments affecting the state and criticised the chief minister’s political activities during bypoll campaigning.

“Brace for tough times. Tamil Nadu is doomed under the TVK government.”

Stalin’s criticism centred on the movement of three South Korean automotive component suppliers to Andhra Pradesh. Hwashin, Seoyon and Iwamet, which supply components to Hyundai and Kia, signed memorandums of understanding with the Andhra Pradesh government for projects in Anantapur.

The projects are worth a combined Rs 1,614 crore and are expected to generate 1,418 jobs. Reports indicate that the companies had previously held discussions with Tamil Nadu before choosing Andhra Pradesh for their investments.

Annamalai Flags Slowdown in Capital Expenditure

Beyond GST collections, Annamalai questioned the pace of capital expenditure by the Tamil Nadu government. He urged the administration to monitor spending across departments, arguing that slower government investment could weaken the wider economic activity generated by public projects.

Capital expenditure typically supports infrastructure development and creates demand for materials, labour, transport and related services. Annamalai argued that a slowdown could affect this economic cycle and reduce opportunities for businesses and workers.

He also called for targeted interventions in districts that have not benefited equally from the state’s industrial development.

Tamil Nadu’s Manufacturing Contribution Raises Questions

Annamalai highlighted what he described as a gap between Tamil Nadu’s large share of India’s factories and its contribution to national manufacturing value addition.

Tamil Nadu accounts for approximately 15.43% to 15.44% of India’s factories, the highest share among states. However, its contribution to India’s manufacturing Gross Value Added (GVA) is estimated at around 10.26% to 10.90%, placing it third nationally.

Annamalai said the state’s share of national manufacturing GVA had remained broadly stagnant over roughly a decade and a half, while other states had narrowed the gap.

“A decade and a half ago, Tamil Nadu’s share of the national manufacturing GVA stood at 10.3%. Remarkably, it appears to have remained largely stagnant since then, while states that once trailed Tamil Nadu are steadily narrowing the gap,” he said.

He also referred to regional imbalance reports prepared by the State Planning Commission, arguing that identifying economic disparities was not enough without targeted action to support districts lagging behind.

“The top-ranking student needs attention, but the students at the bottom of the list need it most,” Annamalai added.

Former DMK Finance Minister Also Questions GST Numbers

Former Tamil Nadu finance minister Thangam Thennarasu, who belongs to the DMK, separately raised concerns over the October GST figures.

He compared Tamil Nadu’s 3% growth with Kerala’s 23%, Andhra Pradesh’s 24% and Telangana’s 14%. Thennarasu argued that import-related taxes had provided some support to collections, while revenue from the state’s own production continued to decline.

He described the trend as an indication of broader economic stagnation and added to the criticism directed at the TVK administration.

GST Growth and Investment Become Political Challenges for TVK Government

The criticism from Annamalai and Stalin has placed Tamil Nadu’s revenue performance and investment environment at the centre of the political debate surrounding the Vijay-led government.

The October GST figures show a return to growth after several months of contraction, but the 3% increase remains below the national average of 22.9%. The movement of the three Korean automotive suppliers to Andhra Pradesh has also raised questions about Tamil Nadu’s ability to retain and attract major industrial projects.

With concerns extending to capital expenditure, manufacturing value addition and regional economic disparities, the TVK government faces scrutiny over how it plans to strengthen revenue growth and maintain Tamil Nadu’s position as a major manufacturing destination.