June 16, 2026
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Fiscal space for new programmes remains minimal as Tamil Nadu's White Paper flags higher deficits, borrowing constraints, and understated liabilities.
Tamil Nadu's White Paper on state finances says there is only minimal fiscal space for new programmes because projected deficits remain high, borrowing is constrained, and committed expenditure is understated. It notes over-projected tax revenue, omitted recurring liabilities, and limited borrowing headroom, leading to a much larger expected revenue deficit and fiscal deficit than budgeted. The paper also highlights worsening debt, interest burden, revenue weakness, and the need for sustained revenue mobilisation, expenditure control, debt management, and clean governance.