A white paper reviewing Tamil Nadu’s public finances for 2021-22 to 2025-26 was released in Chennai by Finance Minister Maria Wilson. The document places the state’s revenue deficit at Rs 78,324 crore and estimates the “true” total debt at Rs 13.18 lakh crore when public sector undertaking (PSU) borrowings are included.
The report says the analysis is based on budget documents, Reserve Bank of India data and audit reports, and compares Tamil Nadu’s post-pandemic fiscal path with states such as Karnataka, Maharashtra and Gujarat. It argues that while comparable states used the recovery period to rein in deficits, Tamil Nadu moved in the opposite direction.
According to the white paper, the state’s own tax revenue ratio fell from 5.93% in 2021-22 to 5.45% in 2025-26, while capital spending dropped to 1.44%. Mandatory expenditure—covering salaries, pensions and interest—rose to 64.4%, which the report says is higher than in the peer states.
It notes that Tamil Nadu’s debt rose from Rs 5.13 lakh crore at the end of March 2021 to Rs 10 lakh crore in 2025-26, adding Rs 4.87 lakh crore over five years. Interest payments are pegged at Rs 67,050 crore, exceeding the state’s total capital outlay of Rs 50,911 crore, with the report stating that 22.80 paise of every rupee of revenue goes towards interest.
The white paper also highlights that debt has grown at an average annual rate of 14.30% while capital investment grew 8.30%, and puts per capita debt at Rs 1.28 lakh. It further claims borrowing as a share is 28.30% for Tamil Nadu, compared with 17.6% for Gujarat, 19.7% for Maharashtra and 23.40% for Karnataka.
