Tamil Nadu’s decade of debt: 309% increase brings repayment pressure and fresh borrowings, says CAG report
A CAG report reveals that Tamil Nadu's public debt surged by 309% over the last decade, reaching ₹7.94 lakh crore. The audit highlights concerns over the state using borrowed funds for interest payments and consumption rather than capital development.
Why it matters
The rising debt-to-repayment ratio poses significant fiscal sustainability challenges for the incoming state government.
Debt is usually the most-talked-about word in Tamil Nadu politics at the time of elections, and is mostly forgotten until the next elections.
An audit of the State Finances for a single year – 2024-25 – by the Comptroller and Auditor General (CAG) of India, especially on fiscal sustainability, has given a few insights into what the new government led by Tamilaga Vettri Kazhagam (TVK) will encounter in the coming years.
According to the CAG report, the total outstanding public debt of the State increased significantly, by 309%, during the decade from 2015-16 to 2024-25, rising from ₹1,94,096 crore to ₹7,94,107 crore. During 2024-25 alone, the outstanding public debt increased by 15.16%, with internal debt constituting the major portion of the increase.
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