TN Assembly 2025| Debt, GSDP ratio well within limits: FM slams fearmongering

CHENNAI: State Finance Minister Thangam Thennarasu informed the State Assembly that the debt to GSDP ratio in Tamil Nadu was well within the limits and the doubts raised by the opposition about it were tantamount to fear-mongering. He was responding to charges made by Leader of Opposition Edappadi Palaniswami.

Speaking during the debate on the motion of thanks to the Governor for his address in the State Assembly, Thennarasu took exception to Leader of Opposition Edappadi K Palaniswami’s criticism of the debt scenario of Tamil Nadu. The minister said that the size of the State’s budget was Rs 1.02 lakh crore in 2011-12, and the GSDP was Rs 7.51 lakh crore. Now, the size of the budget is Rs 4.12 lakh crore and the GSDP is Rs 31.55 lakh crore, Thennarasu said. He reasoned that the debt must be compared with the GSDP.

“When the economy of the State grows, its ability to borrow and repay also increases. Every Finance Commission states how much a particular State can borrow. The Finance Commission prescribed a 28.7% borrowing rate in 2021-22. However, Tamil Nadu’s debt to GSDP ratio was only 27.07%. The minister added that in 2022-23 and 2023-24, it was 29.3% to 26.87% and 29.1% to 26.72%.

In 2024-25, the ratio was 28.9% to 26.4%, putting it safe within limits, Thangam Thennarasu said. State’s borrowing must be compared only with GSDP, he added. The Finance Minister said that what you (Palaniswami) do amounts to fear-mongering. It (fear mongering) is not needed, he said.

The minister was offering a clarification in response to LoP Palaniswami, drawing attention to the State’s debt increase from around Rs 32,775 crore in 2018-19 to Rs 1.04 lakh crore in 2024-25.