Chennai, June 19 (IANS) K. Annamalai on Friday said the White Paper released by the TVK government on Tamil Nadu’s finances has laid bare the extent of fiscal deterioration over the past five years and underscored the need for immediate corrective measures to restore the state’s financial health.

In a statement issued after reviewing the document, Annamalai said the findings contained in the White Paper came as no surprise, as many of the issues highlighted have already been known to economists and policy observers. However, he noted that the report provides a comprehensive assessment of the state’s finances and benchmarks Tamil Nadu’s performance against other similarly industrialised states, offering a clearer picture of the challenges confronting the government.

According to Annamalai, the state’s outstanding debt has touched nearly Rs 10 lakh crore, while the per capita outstanding debt has risen to Rs 1,28,934. He pointed out that interest payments now account for 22.8 per cent of Tamil Nadu’s total revenue receipts, significantly restricting the government’s fiscal flexibility and its ability to invest in development and welfare programmes.

He also highlighted the decline in the state’s Own Tax Revenue (SoTR) to Gross State Domestic Product (GSDP) ratio, which fell from 5.93 per cent in 2021-22 to 5.45 per cent in 2025-26.

The trend, he said, indicated that revenue growth was not keeping pace with economic expansion, raising concerns about the sustainability of public finances.

Annamalai further drew attention to the financial condition of major state public sector undertakings. He noted that PSUs in the power, transport and civil supplies sectors together carry a debt burden of Rs 3.18 lakh crore, adding significantly to the overall fiscal stress faced by the state.

Referring to observations made in the White Paper, he alleged that systemic corruption and administrative inefficiencies had resulted in substantial revenue losses.

Among the issues flagged were the suppression of registration revenues through the undervaluation of real estate transactions and other practices that adversely affected the state’s revenue collection.

Warning that Tamil Nadu has limited time to reverse the trend, Annamalai said the projected decline in the state’s working-age population by 2031 makes fiscal consolidation and revenue strengthening efforts all the more urgent.

“The shrinking working-age population leaves the state with very little time to recover and strengthen its revenue base. This is a serious issue,” he said.

At the same time, Annamalai stressed that the TVK government should not treat the White Paper as an excuse for non-performance. Instead, he urged the administration to focus on repairing the damage and implementing reforms to strengthen the state’s finances.

He also proposed the formation of a functional consultation group comprising economists, academicians, industry experts and specialists from various sectors to develop practical solutions and help steer Tamil Nadu towards long-term fiscal sustainability.

–IANS

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