The Tamil Nadu government announced on Tuesday that every child born in the state effectively carries a debt burden of approximately Rs 1.28 lakh, based on findings from its White Paper on state finances.
White Paper Reveals Dire Financial Picture
The White Paper, released by the TVK government led by Chief Minister C Joseph Vijay, paints a challenging picture of the state's financial position. It states that outstanding debt has nearly doubled over the past five years, and the burden is now being felt across generations.
According to the document, Tamil Nadu faces severe fiscal constraints and has only minimal space for launching new programs. The government reported that the revenue deficit during 2026-27 could reach roughly Rs 90,500 crore, while the fiscal deficit may approach Rs 1.64 lakh crore.
Questioning Budget Assumptions
The White Paper also questioned several assumptions made in the Interim Budget Estimates for 2026-27. It noted that the state's own tax revenue had been projected to grow by 19 percent, but a more realistic growth rate could be significantly lower. The document further claimed that major recurring expenditure items had not been fully accounted for, resulting in substantial under-provisioning.
Limited Borrowing Options
The government said borrowing options were also limited. According to the White Paper, the maximum borrowing the state can realistically expect is about Rs 1.52 lakh crore, which may still be insufficient to meet committed obligations, leaving little room for new schemes.
Six Major Concerns Highlighted
The report listed six major concerns:
- Rising debt
- Increasing interest payments
- A structural revenue deficit
- Weakening own-tax effort
- Growing pressure from committed expenditure
- Higher contingent liabilities
Path Forward
Despite the challenges, the government said the situation was not hopeless. It called for plugging revenue leakages, reducing corruption in revenue-collecting departments, lowering the cost of government works, and mobilizing additional resources without placing new burdens on citizens.
"The first step in correcting a problem is to measure it accurately and present it honestly. That is the purpose of this White Paper," the government said.
