Tamil Nadu's debt burden grew by 22.43% in FY20-21: CAG report

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Tamil Nadu's debt grew by 22.43 per cent in 2020-21 and touched Rs 5,18,796 crore, a Comptroller and Auditor General of India report, tabled in the state assembly on Wednesday said. The report recommended the government to initiate measures for creating increased fiscal space through augmenting its own revenues so as to avoid utilisation of capital receipts to meet revenue expenditure and to achieve the target set in the Tamil Nadu Fiscal Responsibility Act.

The capital expenditure of Rs 36,902 crore and the high fiscal deficit for that year was indicative of utilisation of borrowing for financing revenue expenditure and the debt grew by 22.43 per cent. The Debt-Gross State Domestic Product ratio of 26.94 per cent is over and above the threshold of 25.20 per cent as mandated by the TNFR Act, 2003.

If the off-budget borrowing of Rs 633.99 crore, included in the total outstanding liabilities, the ratio of total debt to GSDP will increase further to 27.30 per cent, it said. On the fiscal position, the report said the revenue deficit increased from Rs 12,964 crore in 2016-17 to Rs 62,326 crore in 2020-21 and the increasing trend indicated that it would be very difficult for the state to adhere to the TNFR target.

"Existence of revenue deficit is a cause of concern as revenue receipts were not able to meet even the revenue expenditure. Moreover, part of capital receipts was utilised to meet revenue expenditure, reducing availability of capital resources," it said. The state government has to initiate measures for creating increased fiscal space through augmenting own revenues so as to avoid utilisation of borrowings to meet revenue expenditure, thereby moving towards achieving the targets set in the TNFR act, the report recommended.