Tamil Nadu Finance White Paper present by TN govt: In a nutshell.
• TN’s fiscal position worsened continuously in the post-Covid period (2021–26), while peer states such as Karnataka, Maharashtra and Gujarat improved/stabilised.
• Outstanding debt nearly doubled:
₹5.13 lakh crore (2021) → ~₹10 lakh crore (2026)
• Revenue deficit hit a record:
₹46,538 crore → ₹78,324 crore
(State borrowing increasingly used for day-to-day spending)
• Own tax collection weakened:
Tax effort fell from 5.93% → 5.45% of GSDP. Lowest level recorded for TN.
• Interest burden surged:
Interest payments rose 61%
₹41,564 crore → ₹67,050 crore
• TN now spends more on servicing debt than creating future assets:
Interest payments exceed capital expenditure (1.32:1).
• Capital expenditure declined:
1.79% → 1.44% of GSDP
• Salaries pensions interest now consume:
64% of revenue receipts
~87% revenue already committed before budgeting.
• Government guarantees almost tripled:
₹65,659 crore → ₹1.8 lakh crore
• Including PSU liabilities, total fiscal exposure estimated at:
~₹13.18 lakh crore
• Fiscal deficit stayed above FRBM limit (3%) every year;
2025–26 estimated at record ₹1.33 lakh crore.
• White Paper flags:
— Revenue leakages
— Systemic corruption in revenue departments
— Rising expenditure pressure
— Need for PSU reforms & debt correction
• 2026–27 outlook:
Revenue deficit could reach ~₹90,500 crore vs ₹48,696 crore projected in Interim Budget.
• Warning:
TN’s ageing population may shrink tax capacity while increasing welfare & healthcare spending.
Bottom line:
The paper argues TN’s fiscal stress is structural, not temporary and calls for tighter revenue mobilisation, expenditure discipline, PSU reform and cleaner governance.