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Total liabilities of Tamilnadu
October 25 , 2025
16 hrs 0 min
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- The Tamil Nadu State Financial Responsibility and Budget Management Act (TNFR Act), 2003, defines total liabilities as “liabilities under the Consolidated Fund of the State and the Public Account of the State”.
- The borrowings made by the corporations/agencies for implementing various State-planned programmes are not captured in its financial accounts.
- These borrowings indirectly add to the liabilities of the State.
- For State-planned programmes, the principal and the interest are paid by the State government.
- To curb off-budget borrowings and bring fiscal discipline among States, with effect from FY 2021-22, borrowings made by ‘State-owned entities’, where principal and/or interest is serviced through State Budgets and/or assignment of taxes/cess or any other State’s revenue, are factored in for the purpose of issuance of borrowing consent to State governments.
- This was done considering the effect of some States bypassing the Net Borrowing Ceiling using off-budget borrowings.
- States, including Tamil Nadu, raise funds through the issue of bonds known as State Development Loans (SDLs).
- The auction for the bonds is conducted by the Reserve Bank of India (RBI).
- The bonds are issued for various tenures and States have to repay the principal along with interest on maturity. SDLs form a major part of Tamil Nadu’s outstanding liabilities.
- The Union government fixes the borrowing ceiling for States. The borrowing ceiling is 3% of the projected Gross State Domestic Product (GSDP) for 2025-26.
- An additional borrowing of 0.5% of the GSDP is allowed for States, contingent on them undertaking electricity distribution reforms and augmentation of intra-state transmission capacity.
- The Tamil Nadu government plans to borrow a total amount of ₹1,62,096.76 crore during 2025-26 and make a repayment of ₹55,844.53 crore.
- As a result, the outstanding borrowing as on March 31, 2026 will be ₹9,29,959.3 crore, as per the State Budget for 2025-26.
- According to the CAG report, the State’s liability on account of interest would be ₹29,159.18 crore from 2024-25 onwards.
- And the principal amount would be ₹3,88,202.82 crore on outstanding market loans over the next 10 years.
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