Chennai: The TVK authorities in Tamil Nadu on Tuesday launched a white paper on the state’s fiscal administration for the 5 post-Covid-19 years from 2021-22 to 2025-26, displaying that underneath DMK guidelines, the fiscal deficit has widened, debt has elevated and the per capita debt burden has doubled to over Rs 1.28 lakh crore.
“It’ll take an extended and arduous effort to get again on monitor,” he says. doc titled White Paper on Fiscal Administration of Tamil Nadu: A Survey of Public Funds, 2021-22 to 2025-26—Finance Minister N. Marie Wilson made the announcement at a press convention.
The publication of the white paper on state funds was one of many first bulletins made by Chief Minister C. Joseph Vijay when he assumed workplace final month.
Wilson stated the doc presents a clear, evidence-based account of the state’s funds and doesn’t keep away from disagreeable conclusions.
The findings point out that coverage and administrative decisions made in the course of the interval studied elevated the state’s debt.
The DMK dismissed the doc as an excuse for the TVK not fulfilling its pre-poll guarantees. “The timing of this white paper is to divert consideration from the deteriorating regulation and order scenario,” DMK spokesperson Saravanan Annadurai stated.
The newspaper highlighted that the state’s excellent debt has virtually doubled from Rs 5.13 billion on the finish of 2020-21 to round Rs 1 million by 2025-26.
In response, Mr. Annadurai stated: “The truth that they omit to say or intentionally don’t spotlight is that the GSDP of the state has additionally grown from Rs 20,000,000 crore to Rs 40,000,000 crore.Once you take a look at that parameter, you shouldn’t take a look at absolute numbers.
“It ought to be thought of close to the GSDP proportion. This proportion remains to be inside the proportion really helpful by the fifteenth Finance Fee,” he instructed ANI on Tuesday.
In response to the report, the per capita debt at present stands at round Rs 1,28,934.
“Tamil Nadu at present has the very best per capita debt amongst massive states. In 2021-22, Tamil Nadu’s per capita debt stood at Rs 77,819 crore, which was already the very best amongst its peer group. It rose to Rs 1,28,934 in 2025-26, a rise of Rs 51,115 per inhabitant in 5 years.” From 2025 to 2026, its per capita debt burden will probably be a lot greater than that of its friends,” the white paper states.
In distinction, the per capita burden in 2025-26 will probably be Rs 111,375 in Karnataka, Rs 70,798 in Gujarat and Rs 77,569 in Maharashtra.
The income deficit in 2025-26 will attain a file excessive of Rs 78,324 crore, equal to 2.22% of GSDP. This determine is greater than the coronavirus-hit 2020-21 stage and elevated from Rs 46,538 crore in 2021-22. In response to the white paper.
The white paper characterizes this price range deficit as structural because the state’s personal tax income (SoTR) as a share of GSDP has declined from 5.93 per cent in 2021-22 to five.45 per cent in 2025-26, the bottom within the state’s historical past.
The report identified that curiosity funds jumped from Rs 41,564 crore in 2021-22 to Rs 67,050 crore in 2025-26. These funds devour about 22.8 % of complete income and greater than 34.8 % of the state’s personal tax income.
The paper exhibits that curiosity spending has exceeded capital funding for the primary time, indicating that nations are spending extra on repaying previous debt than constructing future belongings.
The white paper argues that whereas the three benchmark states – Karnataka, Maharashtra and Gujarat – noticed the post-COVID-19 financial restoration as a chance to cut back their debt-to-GSDP ratio, Tamil Nadu didn’t.
Whereas Gujarat’s debt-to-GSDP ratio settled at 17.6% and Maharashtra’s at 19.7%, Tamil Nadu’s ratio remained within the vary of 27-29% all through the interval and reached 28.3% in 2025-26.
The paper stated promised expenditures comparable to salaries, pensions and curiosity rose from 60.4 per cent of complete income to 64.4 per cent, whereas capital expenditure fell to 1.44 per cent of GSDP. Authorities assure steadiness almost tripled to Rs 1.79 billion.
Additionally learn: At NITI Aayog, Mr. Vijay presents TN Growth Agenda – Bringing collectively NEET, funds, youth expertise and infrastructure wants.
price range deficit
The fiscal deficit has remained above the three% ceiling set by the Tamil Nadu Fiscal Accountability Act in yearly because the coronavirus outbreak. In 2025-2026, the quantity amounted to Rs 1,332.08 billion or about 3.77% of GSDP. That is the very best file ever within the state. In response to the white paper.
Within the post-COVID-19 interval, the deficit confirmed solely a slight contraction within the interim 12 months, earlier than widening once more. Earlier than the pandemic, in 2019-2020, Tamil Nadu typically managed fiscal deficits near or beneath 3% regardless of mounting stress.
Within the 2020-2021 COVID-19 12 months, it rose sharply to about 4.91% attributable to emergency spending and stress-free spending requirements. The paper highlights that the post-2021 restoration has failed to revive warning, resulting in the present rise in ranges.
2021 White Paper
2021 White Paper, Offered by the then newly sworn in DMK authoritieshighlighted the fiscal stresses inherited from the earlier AIADMK regime, together with excessive debt, income shortfalls and losses within the energy sector amid the coronavirus disaster.
Citing a income deficit of round Rs 61.32 billion and a fiscal deficit of over 4% in fiscal 12 months 2021, the report stated the brand new authorities inherited a troublesome scenario with guarantees of reforms.
5 years later, the present White Paper claims that the scenario is even worse on a number of indicators, together with debt ranges which have almost doubled, absolute income deficits reaching new highs, and self-tax efforts declining.
Whereas acknowledging that the pandemic shock is a one-time occasion, the paper attributes ongoing issues primarily to coverage decisions, income leakages, and administrative challenges.
The white paper’s evaluation for subsequent 12 months is optimistic, with state tax revenues anticipated to develop by 19%, however the precise development charges over the previous two years had been solely 6.8% and seven.7%, respectively.
The white paper calls this “clearly unrealistic” and estimates that even with an optimistic development assumption of 12%, revenues are over-forecast by about 14,000 billion rupees.
The interim price range tasks a income deficit of Rs 48,696 million in 2026-27. In response to the standard calculations within the White Paper, the quantity could be round Rs 90,500 billion, which is sort of double. Equally, the price range deficit of Rs 1.22 billion is predicted to surge to round Rs 1.64 billion.
“The scenario could be very bleak each within the brief time period this 12 months and within the medium time period over the subsequent 5 years,” the doc stated.
However the report added that the scenario will not be hopeless, citing income leakages and corruption within the tax assortment sector as areas the place features could possibly be made with out altering tax charges, and procurement reforms that would scale back spending.
The doc additionally requires disciplined income mobilization, rationalization of expenditure, PSU reform and corruption-free governance.
(Edited by Ajeet Tiwari)
Additionally learn: Vijay seeks to destroy the outdated and dominant Dravidianism in Tamil Nadu politics
