Chennai — The Tamil Nadu Legislative Assembly witnessed a sharp political confrontation this week as lawmakers sparred over the state’s growing debt, much of which the ruling Dravida Munnetra Kazhagam (DMK) says was inherited from the previous AIADMK government and should be understood in its historical context. In a debate on the 2026–27 interim budget, opposition leaders from the AIADMK and BJP accused the DMK of poor fiscal management as total outstanding liabilities are projected to surpass ₹10.7 lakh crore by March 2027.
Former AIADMK minister K. P. Munusamy questioned whether the state could realistically achieve its goal of becoming a one-trillion-dollar economy by 2030 if borrowing continues at the current pace, noting that Tamil Nadu’s debt now substantially exceeds that of larger states like Uttar Pradesh.
In response, Finance Minister Thangam Thennarasu defended the government’s fiscal strategy, pointing out that the debt growth under the current regime has been lower than during previous administrations and highlighting Tamil Nadu’s double-digit economic growth. He also accused the Union government of creating fiscal strain by withholding funds, claiming this had “artificially inflated” the state’s debt burden, a charge that adds a broader centre-state dimension to the debate.
State Public Works Minister E. V. Velu noted that the government took office with approximately ₹6.45 lakh crore in inherited liabilities and argued that recent borrowings have been used to continue infrastructure and welfare projects.
With state elections looming, legislators from both sides are using the debt issue as a key point in their budget speeches, making fiscal policy a central theme of this year’s political contest — news as reported.
