Tamil Nadu's debt to reach Rs. 8.33 lakh crore by 2025; FM assures fiscal sustainability

The government is planning to borrow Rs.1,55,584.48 crore during 2024-25 and make a repayment of Rs.49,638.82 crore, Thangam Thennarasu said.
Tamil Nadu Chief Minister M K Stalin with Finance Minister Thangam Thennarasu ahead of presentation of the State Budget 2024-25 in the Assembly in Chennai.
Tamil Nadu Chief Minister M K Stalin with Finance Minister Thangam Thennarasu ahead of presentation of the State Budget 2024-25 in the Assembly in Chennai.(Photo | PTI)

CHENNAI: Finance Minister Thangam Thennarasu on Monday, while presenting the State budget for 2024-25, said that the outstanding Tamil Nadu debt by March 31, 2025, is projected to be Rs.8,33,361.80 crore. The government is planning to borrow Rs.1,55,584.48 crore during 2024-25 and make a repayment of Rs.49,638.82 crore.

"The amount to be borrowed constitutes 26.41 per cent of GSDP in 2024-25. The Outstanding Debt as a percentage of GSDP is expected to be 25.75% in 2025-26 and 25% in 2026-27, which are well within the norms 107 prescribed by the Fifteenth Finance Commission. Therefore, the State aims to maintain debt sustainability as part of its fiscal consolidation roadmap," the finance minister said presenting the budget for 2024-25.

The Minister further said the estimates for receipt and repayment of borrowings have been finalized based on the overall borrowing ceiling fixed by the Government of India.

The Minister said that the Gross State Domestic Product (GSDP) growth of the State is projected at 15.89% during the year 2024-25 and in the subsequent years, the nominal GSDP growth is estimated at 16% per annum.

According to the Medium Term Fiscal Plan (MTFP) for the period from 2024-25 to 2026-27 tabled in the State Assembly along with the budget for 2024-25, the latest estimates released by the Ministry of Statistics and Programme Implementation in Tamil Nadu has grown at 8.19 per cent in 2022-23 in real terms, as compared to the growth of 7.24 per cent at the national level.

In the year 2023-24, the Indian Economy has been pegged to grow at 7.3 per cent in constant terms. Accounting for inflation, this translates to a nominal growth of around 13.5 per cent in nominal terms at the national level. Considering Tamil Nadu has been an engine of growth for the country, the nominal GSDP growth rate is pegged at 15.14 per cent for the year 2023-24.

For the year 2024-25, taking into account the proactive measures taken by the Government to attract investment, generate employment and carry out policy initiatives for comprehensive and sustainable growth, it is projected that the nominal GSDP growth of the State will be at the level of 15.89 per cent. In the subsequent years, the nominal GSDP growth is estimated at 16 per cent per annum.

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