Tamil Nadu’s financial position, borrowings well within control: State Finance Minister Thangam Thennarasu
The Hindu
Tamil Nadu Finance Minister refutes opposition claims of financial crisis, highlighting state's economic growth and responsible borrowing practices.
Tamil Nadu Finance Minister Thangam Thennarasu on Sunday (January 19, 2025) rejected as unfounded the claims made by Leader of Opposition and AIADMK general secretary Edappadi K. Palaniswami that the State’s financial condition was in crisis. The Minister contended that Mr. Palaniswami had made baseless allegations on the financial position of Tamil Nadu without any basic understanding of economics and financial management.
The former Chief Minister had at a public meeting in Chennai on Saturday (January 18,2025) alleged that Tamil Nadu was on the verge of an economic collapse owing to increasing burden of debts. Rejecting this, Mr. Thennarasu told journalists in Virudhunagar that the State Government’s borrowings was well within the limits prescribed by the Union Finance Commission.
According to him, Mr. Palaniswami had made wrong comparison between the quantum of borrowings made during the erstwhile AIADMK regime and that of the current DMK regime in terms of absolute numbers, whereas the borrowing limit is determined by the Gross State Domestic Product (GSDP) and the repaying capacity of the State Government.
Mr. Palaniswami had complained that the borrowings under the four-year rule of DMK was much higher than the total debts during the 10-long years of AIADMK government.
“It is regretable that the former Chief Minister has spoken on this without the basic understanding on State borrowings,” the Finance Minister said.
Recalling that he had explained it in detail in the State Assembly, Mr. Thennarasu said, despite that Mr. Palaniswami had been repeatedly making this allegation. The annual Budget outlay was ₹1.20 lakh crore in 2011 while it has grown to ₹4.12 lakh crore in 2024. Similarly, the GSDP which was ₹7.51 lakh crore in 2011 has increased to ₹31.55 lakh crore.
“A comparison between the Budget outlay and GSDP (in the last 14 years), the basis of quantum of borrowings could be understood ... the growth of the State’s economy would increase the loan repaying capacity of the Government,” he added. Besides, the borrowings of Tamil Nadu Government was well below the prescription of the Union Finance Commission.
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