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The Tamil Nadu government's White Paper on the state's finances has flagged a rapidly ageing population as a major threat to fiscal stability, warning that rising healthcare and social security demands, coupled with a shrinking tax-paying workforce, could exacerbate an already worsening debt burden.
Finance Minister Marie Wilson said Tamil Nadu's total debt burden has reached Rs 13.18 lakh crore, while the debt burden per person in the state has risen to Rs 1.29 lakh, while releasing the White Paper on the state's finance.
According to the White Paper, released at the Secretariat, Tamil Nadu's direct debt nearly doubled over the five-year period, rising from around Rs 5 lakh crore to nearly 10 lakh crore.
The report estimated that the debt burden per person in Tamil Nadu has increased from Rs 67,087 in 2020-21 to Rs 1,28,934 in 2025-26, a rise of 92%.
It further claimed that children born in the state now carry a higher debt burden than states like Maharashtra, Karnataka and Gujarat.
It also stated that the state borrowed Rs 4.87 lakh crore between 2021-22 and 2025-26, which is more than the debt borrowed during its first six decades.
The report also flagged a sharp rise in the state's revenue deficit, which increased from Rs 46,538 crore in 2021-22 to Rs 78,324 crore in 2025-26.
It also described the current figure as the highest on record, and said the state’s revenue deficit remains higher than levels recorded during the COVID-19 pandemic.
It further noted that Tamil Nadu’s fiscal deficit remained above the 3% threshold prescribed under fiscal responsibility norms throughout the period, rising from 3.56% of Gross State Domestic Product (GSDP) in 2021-22 to 3.77% in 2025-26.
The White Paper stated that while other states such as Karnataka, Maharashtra and Gujarat, used the post-pandemic recovery period to strengthen their finances, Tamil Nadu's key fiscal indicators moved in the opposite direction.
Among the major liabilities flagged in the report are debts of Rs 2.47 lakh crore owed by the Tamil Nadu Electricity Board (TNEB).
The transport sector’s debt stood at Rs 61,642 crore, while losses were estimated at Rs 72,667 crore.
According to the report, transport corporations spend Rs 78.81 per kilometre, while generating only Rs 25.97 per kilometre in revenue.
The report also pointed to losses of Rs 7,776 crore in the Chennai Metropolitan Water Supply and Sewerage Board (CMWSSB) and the Tamil Nadu Water Supply and Drainage Board (TNWSDB).
At the same time, committed expenditure on salaries, pensions and interest payments increased from 60.4% to 64.4% of total revenue.
Interest payments alone are estimated at Rs 67,050 crore, the report noted.
The White Paper also flagged demographic changes as a future challenge for the state's finances. It projected that senior citizens would account for 10.6% in 2011 to 18.2% by 2031.
The report further estimated that the newly announced Tamil Nadu Assured Pension Scheme (TAPS) by the previous Dravida Munnetra Kazhagam (DMK) government, would result in an additional annual expenditure of around Rs 5,000 crore.
Among its recommendations, the White Paper called for avoiding revenue leakages through corruption free governance and bringing reforms in loss-making public sector enterprises.
The finance minister said that the report was aimed to provide the people with a transparent and fact-based assessment of the financial position, and added it was not intended as a political criticism against the previous government.
