CAG flags TN's rising interest burden, shrinking capital spend

A CAG report on Tamil Nadu government's FY24 finances had appreciation for a sustainable debt to GSDP ratio but cautioned it on multiple counts, including elimination of revenue deficit, drastic reduction on capital expenditure, and rising interest payments.

- SIDDHARTH PRABHAKAR Chennai

The state was borrowing to meet current consumption and repayment on borrowings instead of creating capital or development activities, the CAG said. The state's Gross State Domestic Product (GSDP) grew 10.92% from 17.43 lakh crore in FY20 to ₹27.21 lakh crore in FY24 with a total debt of ₹7.62 lakh crore.

While TN's revenue receipts grew by 8.55% over the previous year, total expenditure went up from ₹3.26 lakh crore to 3.59 lakh crore, a jump of 9.89%. The state used 52% of its revenue expenditure on interest payments, salaries and pensions, while another major expenditure in FY24 was 1,000 honorarium paid to women per month under the Magalir Urimai Thogai scheme.