Chennai, Jun 16 (PTI) Citing relevant factors in its White Paper on State finances, the TVK government led by Chief Minister C Joseph Vijay on Tuesday underlined constraints and stated that there was only a minimal fiscal space for new programmes.

Revenue deficit (during 2026-27) could reach roughly Rs 90,500 crore and the fiscal deficit may touch Rs 1.64 lakh crore, the government said.

Against the backdrop of a slew of poll promises of the TVK, which includes Rs 2,500 per month assistance to women, the white paper has discussed the challenges ahead.

Gold ring for newborns, eight grams of gold for brides and six free-of-cost cooking gas cylinders a year, per family are part of the host of poll promises made by Vijay ahead of the April 23 TN Assembly polls.

The document, examining the Interim Budget Estimates for 2026-27, said: "State’s Own Tax Revenue is projected to grow 19 per cent to Rs 2,29,579 crore, whereas a realistic business-as-usual growth of about 8 per cent —implies roughly Rs 2,08,000 crore. Taking an optimistic growth rate of 12 per cent, there's an over-projection of about Rs 14,000 crore." On the expenditure side, the estimates omit major recurring items, notably around Rs 16,000 crore of annual loss-funding to the power distribution utility (TNPDCL) and Rs 11,800 crore a year towards the regulatory assets ordered by the Supreme Court. Revenue expenditure, hence, has been under-provided by about Rs 27,800 crore.

The white paper said: "Together these imply that the 2026-27 revenue deficit could reach roughly Rs 90,500 crore — against Rs 48,696 crore shown in the Interim Budget — and the fiscal deficit could approach Rs 1.64 lakh crore against the Rs 1.22 lakh crore budgeted." Furthermore, it said that the financing is tightly constrained.

"Under the Centre's net borrowing ceiling and the power sector reforms, implementation of TAPS, SASCI allowances available, the maximum borrowing the State can realistically expect is about Rs 1.52 lakh crore — already insufficient to cover committed obligations, leaving minimal space for new programmes and a residual funding gap." The government said that the "way forward" identified by the white paper is challenging but not hopeless.

Plugging revenue loss, ending corruption in revenue-collecting departments, reducing the cost of goods and works, and mobilising additional resources without imposing fresh burdens on citizens is the way, it said.

The six principal findings, the government said, reflected deterioration.

Outstanding debt has almost doubled in five years, interest payments now crowd out investment, revenue deficit has become structural, state's own-tax effort has collapsed, committed expenditure has squeezed out development, and contingent liabilities take the true debt position far higher were the findings listed in the document.

The white paper said that such findings are "mutually reinforcing dimensions of a single deterioration, and the inter-generational burden they represent is now largely locked in." Karnataka, Maharashtra and Gujarat improved or stabilised their fiscal positions over the same five years; Tamil Nadu worsened on every major indicator, and the year ahead offers little immediate relief, it said.

Correcting this will require sustained, disciplined effort across revenue mobilisation, expenditure management, PSU reform and debt management — together with clean, corruption-free governance — extending well beyond any single budget cycle.

The TVK government added: "The first step in correcting a problem is to measure it accurately and present it honestly. That is the purpose of this White Paper." PTI VGN VGN ROH

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.