CHENNAI: Senior Congress leader and former union finance minister P Chidambaram on Thursday said that assessing a state’s economic health solely on the basis of its total debt was misleading and analytically flawed.
His response came following the heated debate within the DMK alliance, including the Congress, over the tweet of Praveen Chakravarty – chairman, Professionals’ Congress, & Data Analytics wing – who compared the total debt of TN and the BJP-ruled UP, and termed the TN’s debt situation alarming.
In a post on X, Chidambaram pointed out that in all developed economies, including the US, the UK, Japan, France, and Canada, total public debt continues to rise year after year. India’s overall debt and the combined debt of all states are also increasing annually. This is a normal economic phenomenon, he said.
Emphasising that absolute debt figures were not the right metric, Chidambaram said the more appropriate indicator was the ratio of total debt to Gross State Domestic Product (GSDP). He noted that TN’s debt-to-GSDP ratio has remained stable from 2021-22 to 2025-26, indicating fiscal stability.
He further said that TN has consistently reduced its fiscal deficit every year and, according to current estimates, is expected to reach the NITI Aayog-prescribed limit of three per cent in 2025-26. “This is a commendable achievement,” he added.
While agreeing that fiscal management can always be further improved, Chidambaram said comparing TN’s economy with that of UP was inappropriate and misleading. Such comparisons, he said, ignored structural and developmental differences between states, and distorted public understanding of economic realities.