CHENNAI: As Finance Minister Thangam Thennarasu is set to table the last full-fledged budget of the present government on Friday, expectations are high as to whether the ruling DMK would go full-throttle on populist measures ahead of the 2026 Assembly election, or exercise prudence by ensuring effective implementation of its existing social welfare schemes while maintaining the deficits at optimal level, for the state’s increasing debt has become a key point of criticism for opposition parties.
In a curtain-raiser released for the budget on Thursday, Chief Minister MK Stalin hinted that announcements appealing to the masses cannot be ruled out in the 2025-26 budget. Adding the tagline ‘Everything for everyone’, he said the budget will aim “to ensure the inclusive, decentralised, and widespread growth of Tamil Nadu” in a manner “that would benefit all sections of the society”.
Thennarasu, in the budget for 2024-25, had said the outstanding debt of the state government is likely to burgeon to Rs 8.33 lakh crore by March 31, 2025, and that the government was planning to borrow 1.55 lakh crore during this fiscal while making a repayment of Rs 49,639 crore. The state has set an ambitious target of 14.76 % growth in State’s Own Tax Revenue, which will help in containing the revenue deficit. It remains to be seen whether it has achieved the target.
While the non-release of Samagra Shiksha funds and the flood relief funds that Tamil Nadu sought from the Union government would worsen the debt burden, the Union government agreeing, after sustained pressure, to make the Phase 2 of Chennai Metro Rail project as a central project should have given a breather for TN, which allotted Rs 12.000 crore from its kitty for the project last year.
The overall debt of the state government may touch Rs 10 lakh crore, which may attract criticism from the opposition parties, which have accused the DMK of making Tamil Nadu the state that stands first in borrowing.
However, on Thursday, State Planning Commission vice-chairman J Jeyaranjan, who addressed the media after releasing the Economic Survey, stressed on the need to see the fiscal deficit in the context of the Gross State Domestic Product (GSDP). He said the state’s fiscal deficit is well within the desirable limits as a percentage of the GSDP.
On Saturday, Agriculture Minister MRK Panneerselvam will present the agriculture budget. The budget session of the Assembly, after the presentation of the two budgets, is expected to be stormy with the principal opposition party AIADMK and the BJP set to raise a host of issues concerning the state, particularly on the law and order front. Other issuessbeing implementation of NEP, the three-language formula, the proposed delimitation exercise, alleged increase in crimes against women and Dalits.