Tamil Nadu Finance Minister N Mary Wilson on Tuesday released a white paper on the state’s finances – a pre-poll promise by Chief Minister C Joseph Vijay that is part of an attempt to highlight that the previous DMK government had left the state’s finances in a parlous state.
To be sure, Wilson said there would be no new taxes.
According to the document, Tamil Nadu’s outstanding debt has almost doubled in five years $5.13 lakh crore in 2021-22 to $10 lakh crore in 2025-26; Interest payments rose from $41,564 to $67,050 crore in the same period; The state’s revenue deficit in 2025-26 was higher than that of Karnataka and Maharashtra, at $Rs 78,324 crore; The ratio of state tax revenues to GDP was only 5.45%; The committed spending has led to a reduction in capital spending.
“Today I open the financial books of the state of Tamil Nadu before you… This is an analytical framework built with complete transparency and entirely based on evidence.” Wilson said.
“Every number mentioned here has been extracted from verified documents – specifically from the budget documents of the state government, the Reserve Bank of India and the Comptroller and Auditor General. No political party can refute the data given here as these are all officially audited records of the state government,” he said.
However, the numbers do not indicate that the situation has worsened. For example, between 2021-2022 and 2025-2026, the revenue deficit as a proportion of the General Secretariat for Planning remained approximately constant (2.25% and 2.22%), as did accrued liabilities as a proportion of the General Secretariat for Planning (28.7% and 28.3%). It is clear that the state’s growth helped offset the increase in spending and debt; Tamil Nadu’s MDPP grew by 10.83% in 2025-26, on the back of 11.19% growth in 2024-25. In terms of size of economy, Tamil Nadu is the second largest economy in India after Maharashtra, with a nominal GDP of 35.29 million crore.
Regarding expectations, Wilson said that the way out of this severe crisis, which is considered the strongest and simplest tool, is “administrative efficiency.”
“There is absolutely no need to increase a single tax. By modernizing our administrative system, enhancing the efficiency of our employees’ performance, plugging revenue leakages and eliminating corruption, we can naturally increase government revenues,” he said.
He stressed that “clean and honest management inherently turns into a complete financial asset.”
In the details of the plan, he said that it depends on plugging revenue leakages in departments such as commercial taxes, stamp duties, and mining, reducing procurement costs through competitive bidding, and structural reform of public sector projects.
He said the shift will also be a focus from consumption spending to capital investment because investments in infrastructure have the potential to attract private investments.
“All of these measures fall directly under the sovereign authority of the state government. None of them includes imposing an additional tax burden on citizens. Only through these administrative reforms can we create the necessary fiscal space to finance new social welfare plans for the people,” he said.
Meanwhile, reacting to the release of the white paper, the DMK termed it a “blank sheet of paper” and not a “white paper”.
