Estimates notwithstanding, T.N. government is hopeful of sticking to fiscal norms
Tamil Nadu Finance Minister Thangam Thennarasu presenting the Interim Budget in the Assembly on February 17, 2026. | Photo Credit: File photo Estimates fixed by the Tamil Nadu government with respect to various fiscal indicators for 2026-27 have raised questions over whether they are realistic, despite the State undergoing a “severe fiscal stress” arising out of the Goods and Services Tax (GST) rate rationalisation and the Union government’s actions. Be it gross fiscal deficit or the ratio of revenue deficit to the Gross State Domestic Product (GSDP) or interest payment to Revenue Receipts, the estimates are all favourable. This has been done even though the State, after 2022-23, has been increasingly under fiscal strain. The improvement witnessed in 2022-23 was primarily attributed to the economic recovery all over the country after being hit by the COVID-19 pandemic for two years from 2020. Since 2023-24, one of the factors that contributed to the rise in revenue expenditure was the implementation of the Kalaignar Magalir Urimai Thittam, wherein nearly 1.31 crore women are now being paid ₹1,000 …
