The CAG report added that subsidies have also increased steadily, from ₹20,144 crore in 2019-20 to ₹37,749 crore in 2023-24
Published Oct 18, 2025 | 4:45 PM ⚊ Updated Oct 18, 2025 | 4:46 PM
CAG report. (Representative image)
Synopsis: With the debt-to-GSDP ratio rising from 24.35 percent to 28 percent, the CAG warned that Tamil Nadu may struggle to meet its fiscal responsibility targets, including eliminating the revenue deficit by 2025-26.
Tamil Nadu is borrowing heavily, but most of the funds are being used for routine expenses rather than building infrastructure, according to the Comptroller and Auditor General (CAG) report on state finances for 2023-24.
The report further added that, “Only 31 percent of the state’s borrowings were directed towards capital expenditure, while the rest went into paying salaries, subsidies, and repaying earlier loans. The state’s total debt, including off-budget borrowings through public sector undertakings and special purpose vehicles, has reached ₹7.62 lakh crore.”
The report highlighted growing fiscal stress, with the revenue deficit rising by 24.6 percent from ₹36,215 crore in 2022-23 to ₹45,121 crore in 2023-24. The fiscal deficit also grew 10.4 percent, standing at ₹90,430 crore.
“Revenue expenditure, which covers day-to-day operations, has consistently formed the bulk of spending, rising from ₹2,10,435 crore in 2019-20 to ₹3,09,718 crore in 2023-24, making up around 86–88 percent of total expenditure,” it added.
Referring to capital spending, the report noted that, “It remained low at ₹40,500 crore, or just 11.3 percent of total outlay, indicating limited investment in infrastructure and development projects.”
The CAG report added that subsidies have also increased steadily, from ₹20,144 crore in 2019-20 to ₹37,749 crore in 2023-24, with an additional ₹801.77 crore spent on implicit subsidies for loss-making entities.
With the debt-to-GSDP ratio rising from 24.35 percent to 28 percent, the CAG warned that Tamil Nadu may struggle to meet its fiscal responsibility targets, including eliminating the revenue deficit by 2025-26.
