TN finances 'sobering', points to 'structural deterioration', says CM Vijay

Business To Business, Chennai, 16^th June, 2026:    C. Joseph Vijay on Tuesday described Tamil Nadu's fiscal management over the past five years as "sobering" and warned of a "structural deterioration" in the state's finances if corrective measures are not taken.
In the preface to a white paper released by N. Marie Wilson, Vijay said the state's fiscal challenges have developed during a period when conditions existed for financial consolidation after the COVID-19 pandemic.
The document examined the period from 2021-22 to 2025-26, focusing on:

• Post-pandemic fiscal recovery.
• Government borrowing and debt trends.
• Revenue and expenditure patterns.
• Fiscal consolidation opportunities.
• Long-term sustainability of public finances.

• Financial pressures could intensify over time.
• Future governments could face reduced fiscal flexibility.
• Development spending may come under strain.
• The burden would disproportionately affect younger generations.

• Major state-owned power, transport, and civil-supplies undertakings carry combined debt of about ₹3.18 lakh crore.
• Outstanding government guarantees increased from ₹65,659 crore in 2021 to ₹1.80 lakh crore by March 2026.

• Rising committed expenditures.
• Weak revenue growth relative to spending.
• Loss-making public-sector entities.
• Growing debt-servicing obligations.
• Increasing contingent liabilities.