The Tamil Nadu government has announced a massive ₹79,219.06 crore spending from the state exchequer in its maiden budget, according to reports from Business Standard. The announcements were made during the 28-day budget session that concluded on September 8, featuring 17 mega-announcements across departments under Rule 110 in the Assembly. The spending includes a transformative vision to modernise state infrastructure, secure energy independence, and deliver comprehensive agrarian relief. The budget comes amid fierce criticism from political parties that the fiscal trajectory will cause severe strain on the economy, with the government reiterating its commitment for fiscal prudence.
The budget includes significant infrastructure investments totaling ₹57,703 crore in capital expenditure, as reported by Business Standard. Key projects include a ₹20,800 crore Thoothukudi Supercritical Thermal Power Plant on PPP model, ₹33,066 crore statewide transmission modernisation, and ₹11,000 crore for infrastructure and roads. The power sector overhaul includes ₹55,628 crore in total investments, with the government implementing the Annapoorani Super Six free LPG scheme costing ₹4,000 crore annually and the 200-unit free electricity subsidy costing ₹1,730 crore annually. The implementation of these power projects will be phased over 3-5 years, with ₹1,500 crore allocated for short-term (0-12 months), ₹2,000 crore for medium-term (13 years), and ₹35,000+ crore for long-term (3-5+ years).
The budget allocates ₹10,000 crore for welfare and agriculture schemes, including ₹953.06 crore for cooperative crop loan relief expansion and ₹2,044 crore for cooperative crop loan debt relief, as reported by Business Standard. The government has announced providing three LPG cylinders and will fully absorb the ₹60 crore monthly cost for Aavin milk producers without raising retail costs for consumers. Additionally, the budget includes ₹1,850 crore for urban road repairs and junction modernisation and ₹1,200 crore for a new Assembly-cum-Secretariat Complex at Pattinapakkam in Mylapore. The government has also announced the official withdrawal of legal cases against protesting farmers and teachers, and confirmed it is dropping plans for the controversial Parandur greenfield airport, refocusing agrarian strategy toward direct financial support and cooperative credit restructuring.
According to Business Standard, the budget comes amid fierce criticism from political parties that the fiscal trajectory will cause severe strain on the economy. The government's White Paper highlighted total outstanding debt nearing ₹10.98 trillion and a projected fiscal deficit of ₹1.21 trillion. With roughly one-third of state revenues already dedicated to interest servicing, adding ₹8,500 crore in recurring operational expenses runs the risk of expanding the revenue deficit currently at ₹55,775 crore. The state's debt-to-GSDP ratio stands at 27.01 percent, significantly exceeding the economically stable benchmark of 23 percent. To counter the deflating cash reserves, the TVK government has set up an economic advisory council headed by economist Montek Singh Ahluwalia to aggressively raise an additional ₹15,000 crore this year through improved revenue mobilisation, with approximately ₹2,000 crore already secured.
Opposition parties have sharply criticised the budget, with AIADMK launching attacks on the location selection for the new Secretariat-Assembly Complex, as reported by Business Standard. Former Chief Minister Edappadi K Palaniswami argued that the state treasury is already under massive financial strain and spending ₹1,200 crore for the administrative hub prioritised vanity over public welfare. Former Finance Minister Thangam Thennarasu pointed out that while annual borrowing hovered around ₹1 trillion during the DMK tenure, the TVK government has skyrocketed annual state borrowing to ₹1.22 trillion. However, Finance Minister N Marie Wilson announced that the state will borrow ₹1,73,445 crore during this financial year alone to maintain government operations. The ruling Tamilaga Vettri Kazhagam maintains that balanced capital spending and rural relief will stimulate wider economic activity and long-term tax revenues across Tamil Nadu, despite massive pre-election hype with the budget remaining silent on delivering core TVK campaign promises.
