Chennai, 18 October (H.S.) : The Comptroller and Auditor General of India (CAG), in its report on Tamil Nadu’s State finances for the fiscal year 2023-24, has highlighted a significant surge in fiscal stress, noting that the state is increasingly borrowing funds not for asset creation but for meeting current consumption needs and debt repayment. The report, tabled in the State Assembly on Friday, revealed that only 31% of the total borrowings were utilised for capital expenditure, which is vital for infrastructure creation and long-term development.

According to the CAG, the continuous mismatch between receipts and expenditure is alarming. The state's outstanding debts and liabilities, including Off-Budget Borrowings (OBB), have swelled to Rs 7.62 lakh crore. The revenue deficit registered a substantial increase of 24.59% over the previous year, rising to Rs 45,121 crore, while the fiscal deficit climbed to Rs 90,430 crore. The report indicated that revenue expenditure, which covers day-to-day operations like salaries, constitutes a significant portion—ranging between 85.68% and 87.65%—of the total expenditure. In contrast, capital expenditure stood at a mere Rs 40,500 crore for 2023-24.

The authority’s analysis, as per the CAG, indicates a worrying trend in subsidy payouts, which escalated to Rs 37,749 crore in 2023-24. Furthermore, the State’s Debt-GSDP ratio has risen to 28%. The CAG pointed out that based on the current trajectory, the State is unlikely to meet the Tamil Nadu Fiscal Responsibility Act (TNFR) target of eliminating the revenue deficit by 2025-26. The fiscal deficit also exceeded the TNFR target of 3% of GSDP, standing at 3.32% for the year, underscoring the urgency for the state government to re-evaluate its spending priorities.

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Hindusthan Samachar / Dr. R. B. Chaudhary