CHENNAI: Stating that the TVK government has inherited a debt-laden and fiscally stressed treasury from the previous DMK regime, Finance Minister N Marie Wilson on Wednesday said that though the repair has been started, the present government would need at least two years to bring the financial administration back on track of fiscal prudence.
This statement indicated that many of the populist election promises of the TVK will be implemented cautiously depending on the improvement in the financial position of the State government.
"Tamil Nadu will emerge as a State that has fiscally prudent governance for balanced and inclusive economic growth," the Minister said and took a dig at the previous DMK regime for "focussing only on short-term political gains with the belief that they should make best use of their five-year term."
Wilson went on to say that on the contrary, the TVK government looks forward to at least 15 years of sustained growth through consistent policies and providing clean and efficient governance.
Significantly, the Finance Minister said the overall outstanding liability of the State is estimated to be Rs 10,98,768 crore in the revised budget estimates for 2026-27 as against Rs 10,99,458 crore in the interim budget for 2026-27. Thus, the revised budget marginally lowered the State's projected year-end debt by Rs 690 crore, indicating a slight improvement in the government's borrowing outlook rather than a substantial reduction in the overall debt burden.
The Minister also pointed out that the outstanding debt, that is, the overall liability to GSDP ratio in revised budget estimates 2026-27, is estimated at 27.01% as compared to 27.03% in the interim budget estimates 2026-27. He said the government would improve tax collection, plug revenue leakages, increase grants from the Union Government and strengthen revenue mobilisation so that both the revenue and fiscal deficits decline in the coming years, creating more room for capital investment and economic growth.
The Finance Minister said the government had revised its revenue estimates to make them more realistic instead of relying on overly optimistic projections. The State now expects to collect Rs 2,26,740 crore through its own taxes in 2026-27, with commercial taxes contributing the largest share. The government also expects to earn Rs 27,835 crore through non-tax revenues such as fees and other receipts. Together, the State's own revenues are estimated at Rs 2,54,575 crore, accounting for nearly 73% of the government's total revenue.
On the expenditure side, the Minister said revenue expenditure had increased to Rs 4,05,802 crore, mainly because of the implementation of major welfare commitments such as the farm loan waiver, free electricity up to 200 units and the Thai Maaman Thanga Mothiram scheme.
Capital expenditure has been revised slightly downward to Rs 56,985 crore, while the total capital outlay, including loans and advances, is estimated at Rs 66,060 crore. Because revenue expenditure has increased and earlier revenue projections were too optimistic, the revenue deficit has been revised upwards to Rs 55,775 crore. However, the fiscal deficit is estimated at Rs 1,21,819 crore, which remains within the limits prescribed under the Tamil Nadu Fiscal Responsibility Act.
