Chennai, February 17: Tamil Nadu’s outstanding public debt is expected to rise to ₹10.71 lakh crore by the fiscal year 2026-27. This information was shared by Finance Minister Thangam Thennarasu during the presentation of the interim budget in the assembly on Tuesday.
According to the interim budget estimates for 2026-27, the state’s debt is likely to increase from the revised estimates of ₹9.52 lakh crore for 2025-26. The previous budget estimates had projected this amount at ₹9.29 lakh crore.
The Finance Minister clarified that the revised estimates for 2025-26 include ₹9,523 crore related to the Chennai Metro Rail Phase-II project, which had been approved as a central sector project. He noted that this amount should be reflected in the central government’s accounts. However, despite repeated requests, the central government has not made the necessary booking entries, artificially inflating the state’s debt.
Excluding this amount, the outstanding debt for the state is projected to be ₹9.42 lakh crore in the revised estimates for 2025-26 and ₹10.62 lakh crore in the interim budget estimates for 2026-27.
For 2026-27, the state plans to borrow ₹1.79 lakh crore and repay ₹60,413.42 crore. The ratio of this debt to the Gross State Domestic Product (GSDP) is estimated to be 26.12 percent.
The interim budget estimates a revenue deficit of ₹48,696.32 crore for 2026-27. In comparison, the revised estimates for 2025-26 indicated a revenue deficit of ₹69,219 crore, while the original budget estimates for that year had projected it at ₹41,635 crore.
Minister Thennarasu explained that the increase in the revenue deficit for 2025-26 was due to GST rate cuts, withholding of funds under centrally sponsored schemes, and increased spending on the Tamil Nadu Power Distribution Corporation Limited’s loss funding. He stated that without these fiscal challenges, the deficit could have been controlled according to initial estimates.
The fiscal deficit for 2026-27 is projected to be ₹1.21 lakh crore, slightly lower than the revised estimates of ₹1.24 lakh crore for 2025-26. As a percentage of GSDP, this is expected to decrease from 3.48 percent to 3 percent, indicating fiscal consolidation. The minister remarked that if the central government had provided more support in the current fiscal year, the state’s financial position could have been stronger.
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