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Tamil Nadu’s existent outstanding indebtedness stands astatine ₹13.18 lakh crore, including the combined indebtedness of nationalist assemblage undertakings (PSUs), says a White Paper released by Finance Minister N. Marie Wilson connected Tuesday (June 16, 2026).
He released the White Paper connected the Fiscal Management of Tamil Nadu-An Examination of Public Finances 2021-22 to 2025-26 at the Secretariat. Chief Minister C. Joseph Vijay said aft assuming bureau past period that his authorities would merchandise a White Paper connected the State’s finances.
According to the report, the header indebtedness fig of ₹10 lakh crore in 2025-26 captures lone the State’s nonstop borrowings done marketplace loans, organization debt, and nationalist relationship liabilities. It does not seizure the borrowings of the PSUs, statutory boards, and peculiar intent vehicles that the State guarantees oregon implicitly supports.
The largest root of debt
The powerfulness assemblage remains the azygous largest root of indebtedness among the PSUs, accounting for ₹2.47 lakh crore. Among its entities, the Tamil Nadu Power Distribution Corporation (TNPDCL) (the erstwhile TANGEDCO/TNEB) has an outstanding indebtedness of ₹1.07 lakh crore, portion the Tamil Nadu Power Generation Corporation (TNPGCL) has a indebtedness of ₹1.03 lakh crore. The Tamil Nadu Transmission Corporation (TANTRANSCO) has a indebtedness of ₹30,965 crore, and the Tamil Nadu Green Energy Corporation has a indebtedness of ₹5,672 crore.
The outstanding indebtedness of 8 authorities transport undertakings stands astatine ₹43,865 crore, portion that of the Tamil Nadu Civil Supplies Corporation is ₹27,181 crore, the study said. Together the outstanding indebtedness of these PSUs stands astatine 3.18 lakh crore.
The study besides compared Tamil Nadu’s cardinal fiscal indicators with those of the adjacent States specified arsenic Karnataka, Maharashtra, and Gujarat, which broadly stock comparable per capita income levels, diversified concern structures, important municipality populations, and historically akin fiscal starting positions.
The study said the State’s outstanding indebtedness had astir doubled successful the 5 years since April 1, 2021, rising from ₹5.13 lakh crore to astir ₹10 lakh crore as of March 31, 2026. “The debt-to-GSDP ratio has remained elevated passim the post-COVID play and stood astatine 28.3% successful 2025-26, with nary worldly fiscal consolidation from the COVID-era highest that the different adjacent States person achieved,” it said.
Interest measure exceeds superior expenditure
Interest payments devour astir 23% of the full gross receipts and astir 35% of the State’s Own Tax Revenue (SOTR). At ₹67,050 crore in 2025-26, the yearly involvement measure exceeds the yearly superior expenditure by astir one-third, the study said.
The study pointed retired that the gross shortage had go structural. The 2025-26 Pre-Actuals projects a gross shortage of ₹78,324 crore, equivalent to 2.2% of the GSDP, the highest recorded successful implicit presumption and exceeding adjacent the COVID twelvemonth level. The State is borrowing to money existent depletion alternatively than investment, the study said.
The SOTR-to-GSDP ratio has declined from 5.93% successful 2021-22 to 5.45% successful 2025-26, the lowest level successful the past 2 decades and the steepest diminution among the adjacent States during the post-COVID period.
Committed expenditure, including salaries, pensions, and involvement payments, is among the highest, compared with the adjacent States. It roseate from ₹1.25 lakh crore to ₹1.89 lakh crore, expanding its stock of gross receipts from astir 60% to 64%, good supra the sub-50% levels maintained by the different adjacent States. This has eroded the fiscal abstraction disposable for superior expenditure and investment. At 11.8%, the superior expenditure-to-total expenditure ratio is the lowest among the adjacent States, the study pointed out.
The Minister pointed retired that the Tamil Nadu Fiscal Responsibility Act, 2003, had been amended 8 times truthful acold to defer achieving a zero gross shortage and limiting the fiscal shortage to 3%.
Growing aged population
The study besides highlighted the increasing aged population, which is projected to relationship for 18.2% of the State’s full colonisation by 2031. According to the Union Ministry of Health and Family Welfare’s colonisation projections, Tamil Nadu volition person the highest proportionality of aged radical among the large States by 2031.
It besides highlighted the declining working-age population, the rising dependency ratio, and their implications, including a shrinking taxation basal and rising societal information obligations. The study noted that portion the adjacent States either improved oregon stabilised their fiscal positions during the investigation period, Tamil Nadu’s fiscal presumption worsened connected each large indicator, and the twelvemonth up offered small contiguous relief.
The Minister said correcting this concern would necessitate sustained efforts successful gross mobilisation, expenditure management, PSU reforms, and indebtedness absorption extending beyond a azygous Budget cycle.
Systemic leakages
Mr. Wilson said the caller authorities would absorption connected fixing gross losses owed to systemic leakages and administrative deterioration successful commercialized taxes, stamps and registration, excise, and mining. He said that by plugging leakages successful these areas, the authorities could mobilise astir ₹20,000 crore in further gross this fiscal year. He said the authorities would initiate structural reforms successful the PSUs to amended their efficiency.
