Chennai, August 22: The Tamil Nadu government issued bonds in July to raise ₹12,044 crore due to expenditures exceeding revenues. Fiscal data reveals that in the first four months of the current financial year, spending outpaced income. These figures emerged more than 100 days after the TVK government presented its first budget.
Expectations were high for operational changes with the new government, but the latest debt figures have drawn attention to the state’s economic situation. Between April and July, Tamil Nadu generated total revenues of ₹89,718 crore. Tax revenues contributed the most at ₹82,566 crore, while non-tax revenues accounted for ₹4,070 crore. Additionally, grants from the central government added ₹3,082 crore.
The state earns from various sources, including the Goods and Services Tax (GST), stamp duty and registration fees, land-related income, sales and commercial taxes, state excise duties, its share of central taxes, other duties, and non-tax revenues. It also receives grants from the central government. However, total expenditures during the April-July period reached ₹1.23 lakh crore, resulting in a revenue deficit of ₹25,267 crore.
Interest payments on existing loans were among the largest expenditures, totaling ₹21,176 crore, while pension payments amounted to ₹17,237 crore. Due to spending exceeding income, the government has relied on borrowing from the market to fund welfare schemes, development projects, and other necessities. Typically, funds are raised by issuing government securities and borrowing from banks and other authorized channels.
In the first four months of the financial year, Tamil Nadu’s total borrowing stood at ₹32,925 crore. By June, the total was ₹20,881 crore, indicating that the state added ₹12,044 crore to its debt in July alone. This borrowing is higher compared to the same period in the previous financial year. Between April and July 2025, the government earned ₹85,876 crore in revenue while spending ₹1.09 lakh crore.
During those four months, borrowing was ₹30,956 crore. Recent data indicates that while the government’s revenue has improved year-on-year, expenditures and borrowing have also increased. The widening gap suggests that the new government’s fiscal strategy will face scrutiny, particularly regarding its ability to manage debt, interest liabilities, and ongoing revenue deficits while securing funding for promised initiatives.
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