Chennai, June 16:
Tamil Nadu’s overall financial liabilities have reportedly surged to an estimated ₹13.18 lakh crore, with outstanding direct debt nearing ₹10 lakh crore, according to a White Paper on state finances released by the Vijay-led government.
The report claims that the state’s debt burden has nearly doubled in the past five years under the previous M K Stalin-led Dravida Munnetra Kazhagam government. It also states that every child born in Tamil Nadu effectively carries a notional debt burden of ₹1.28 lakh.
According to the financial status report presented by Finance Minister N. Marie Wilson, Tamil Nadu’s direct debt has increased from around ₹4.8 lakh crore five years ago to nearly ₹10 lakh crore now. Including off-budget borrowings, guarantees, and other liabilities, the total financial burden is estimated at ₹13.18 lakh crore.
The document further alleges that a significant portion of recent borrowings was used for routine expenditure rather than long-term infrastructure creation, raising concerns about fiscal sustainability.
It highlights that the state’s debt-to-GSDP ratio stands at around 28%, which is higher compared to several large states such as Gujarat, Maharashtra, and Karnataka. The report also notes that revenue deficit has widened significantly over the past five years, indicating a growing gap between income and expenditure.
Another key concern raised is the rising cost of debt servicing, with nearly 23 paise of every rupee earned reportedly going towards interest payments. GST revenue growth of about 5.45% is described as insufficient to offset expenditure pressures.
The White Paper, presented as one of the first major announcements after Vijay assumed office, also criticises the previous fiscal management practices of the state government and warns of increasing pressure on public finances.
Overall, the report paints a picture of rising debt, widening deficits, and constrained revenue growth, positioning fiscal consolidation as a key challenge for the current administration.