Debt-GSDP Ratio Trends
Tamil Nadu Debt and Fiscal Trends 2025: The Comptroller and Auditor-General (CAG) of India assessed Tamil Nadu’s fiscal performance for 2023-24. The report highlighted that the State made progress in only one out of three fiscal targets. The notable improvement was in the outstanding liability-Gross State Domestic Product (GSDP) ratio, which decreased from the target of 29.1% to 28%.
Static GK fact: Tamil Nadu is the 11th largest state by area and 6th by population in India.
From 2019-20 to 2023-24, the debt-GSDP ratio showed an upward trend initially, rising from 24.35% in 2019-20 to 28.83% in 2021-22. It marginally decreased to 28.39% in 2022-23 and finally stood at 28% in 2023-24, reflecting moderate fiscal consolidation. The debt figure also includes Off-Budget Borrowings (OBB).
Fiscal Deficit Status
Despite the reduction in the debt-GSDP ratio, the Fiscal Deficit (FD) to GSDP ratio remained above target at 3.32% in 2023-24. This exceeds the ceiling set under the Tamil Nadu State Fiscal Responsibility and Budget Management Act, which aimed to achieve 3% FD-GSDP ratio by March 31, 2025.
Static GK Tip: Fiscal deficit measures the gap between total expenditure and revenue receipts of a government in a financial year.
Revenue Deficit Concerns
The revenue deficit worsened slightly in 2023-24, increasing by 0.15% of GSDP over the previous year. It rose from ₹36,215 crore in 2022-23 to ₹45,121 crore in 2023-24, which is 71.5% higher than the Medium-Term Fiscal Plan projections. The State’s target is to eliminate revenue deficit by 2025-26, highlighting the need for stricter revenue management.
Static GK fact: Tamil Nadu contributes nearly 8% to India’s GDP, making revenue and fiscal management critical for overall economic stability.
Fiscal Targets and Progress
The CAG report set three primary fiscal targets:
- Elimination of revenue deficit by 2025-26
- Achievement of fiscal deficit-GSDP ratio at 3% by March 2025
- Reduction of debt-GSDP ratio to 29.1%
Only the debt-GSDP target showed improvement, while revenue and fiscal deficits remained above the desired benchmarks.
Static GK Tip: Medium-term fiscal planning is essential for sustainable state finances and aligns with India’s overall fiscal consolidation goals.
Challenges Ahead
The key challenges for Tamil Nadu include controlling revenue expenditure, managing off-budget borrowing, and ensuring fiscal discipline to meet the 2025-26 targets. While debt levels are under control, persistent revenue and fiscal deficits could strain resources if corrective measures are delayed.
Static Usthadian Current Affairs Table
Tamil Nadu Debt and Fiscal Trends 2025:
| Topic | Detail |
| Debt-GSDP ratio 2023-24 | 28% |
| Fiscal Deficit-GSDP ratio 2023-24 | 3.32% |
| Revenue deficit 2023-24 | ₹45,121 crore |
| Revenue deficit increase | 0.15% of GSDP over previous year |
| Debt trend 2019-20 to 2023-24 | 24.35% → 28% |
| FD target by 2025 | 3% of GSDP |
| Revenue deficit elimination target | By 2025-26 |
| Off-Budget Borrowing | Included in debt |
| Medium-Term Fiscal Plan deviation | Revenue deficit 71.5% higher |
| CAG assessment period | 2019-20 to 2023-24 |
