The Tamil Nadu government’s debt is increasing year by year and is expected to cross the 10 lakh crore mark soon. Let’s take a closer look at the revenue deficit in the Tamil Nadu government administration and the reasons for it.
It is estimated that the Tamil Nadu government’s debt, which was 4.86 lakh crore rupees in 2021-2022 when the DMK took office, will increase to 8.33 lakh crore rupees by March 2025.
That is, the Tamil Nadu government has borrowed about 3.5 lakh crore rupees in the last four years alone. If the same trend continues, it has been reported that the debt of Tamil Nadu will soon cross the 10 lakh crore mark.
The main reason for the increase in debt is said to be the increase in expenditure compared to the revenue generated by the Tamil Nadu government. The revenue deficit, which was 2,727 crore rupees in 2010-2011, gradually increased in the next three years and increased to 6,407 crore rupees in 2014-2015.
The revenue deficit doubled in 2016-2017 to Rs 11,985 crore and continued to increase in subsequent years.
In 2020-2021, during a period when the global economy was facing a major impact due to the spread of Corona, the revenue deficit of the Tamil Nadu government increased manifold.
That is, the revenue deficit of the Tamil Nadu government increased to an unprecedented level of Rs 62,325 crore. Even after the spread of the Covid infection started to decrease in the subsequent years, there was no major change in the revenue deficit of the Tamil Nadu government.
The revenue deficit, which decreased to 46,538 crores in 2021-2022 and 36,215 crores in 2022-2023, increased again to 45,121 crores in 2023-2024 and 49,271 crores in 2024-2025. Economists say that the DMK, which came to power promising to reduce the revenue deficit and reduce the debt burden, is now increasing the debt burden more and more.
While the total budget of the Tamil Nadu government last year was 4,12,000 crores, there was a revenue deficit of 49,000 crores. The main reason for this increase in revenue deficit is said to be the Women’s Rights Scheme, under which the Tamil Nadu government provides a monthly allowance of 1,000 rupees to heads of households.
Moreover, the allocation of a large amount of funds to pay off the debt of the Tamil Nadu Electricity Board, to provide pending cash benefits to transport employees, and to provide subsidies is said to be one of the reasons for the increase in revenue deficit.
In addition, the state government is also forced to allocate a large amount of funds for natural disasters such as unexpected rains, floods, and storms every year and engage in rescue and relief work.
At the same time, the amount of interest to be paid on public debt received in previous years is also increasing every year. While Rs. 63 thousand crore was allocated for interest payment in 2024-2025, it is expected to increase to Rs. 70 thousand crore in 2025-2026 and to Rs. 76 thousand crore in 2026-2027.
There have also been complaints that about 20 percent of the total budget allocated by the Tamil Nadu government is spent only on interest payment.
However, the Tamil Nadu government has clarified that all types of loans taken by the Tamil Nadu government are within the limits set by the 15th Finance Commission of the Central Government.
The DMK, which came to power after a decade, has issued a white paper on the financial position of the Tamil Nadu government and formed a committee of world-class economists to improve the financial position, but past activities show that it has not taken any constructive steps to increase the revenue of the Tamil Nadu government or reduce the deficit.
