Tamil Nadu Finance Secretary MA Siddique at a press conference to announce the features of the TN budget
| Photo Credit:
Bijoy Ghosh
Tamil Nadu’s finances remain in a “difficult position” but have begun showing signs of improvement after the last few months of corrective measures, TN Finance Secretary MA Siddique said here on Wednesday. “We have tried to make a balanced effort,” he told mediapersons, noting that the Budget focuses on improving revenue collections, optimising expenditure and bringing efficiency into operations, while retaining the citizens’ welfare goal.Finance Minister N Marie Wilson, in his budget speech, said that the TVK-led Government is targeting the creation of an additional ₹15,000 crore of fiscal space during FY27 through improved revenue mobilisation, and the Secretary says that about ₹2,000 crore of this has already come in. Revenue Measures“There are other efforts which have been made, particularly on the liquor side, where we have achieved about ₹1,500 crore [in fiscal space]. Action is also being taken on the stamps and duties registration side to review the anomalies in areas like Guideline value,” he added.As per Siddique, the government intends to use these savings to gradually roll out new schemes promised in the vision document. However, he stated that this would take time and would occur in phases over the next year or two.On the commercial taxes front, restoring taxpayer confidence through a clean and faceless tax administration is a key priority, as per the Budget, along with steps such as Audit. The secretary said that with these measures, expect GST revenue growth of around 12 per cent. The State is also projecting higher revenues from alcohol, with VAT and excise collections expected to rise to ₹56,000 crore in 2026-27 from ₹51,000 crore in the previous year, aided by tighter controls and improved administration.Debt DefenceResponding to concerns over rising debt, Siddique said borrowing for development was unavoidable. “We cannot reduce the debt. It will only increase every year. What is important is that the rate at which income rises should be faster than the rate at which debt rises,” he said. The ratio of Liability to GSDP is expected to ease further to 26.57 per cent in 2027-28 and 26.10 per cent in 2028-29.Tamil Nadu’s fiscal deficit has been budgeted at around ₹1.22 lakh crore or around 3 per cent of Gross State Domestic Product (GSDP). While the government intends to adhere to this level, Siddique said they may seek additional borrowing headroom from the Centre for sectors such as power, where investments are needed at the moment, and could help generate long-term economic returns.Capex ClarificationAddressing concerns over the reduction in capital expenditure compared with the previous DMK Government’s Interim Budget estimates, Siddique noted that the Capex estimates of ₹56,985 crore in this Budget represent an increase of around 11 per cent over 2025-26, while reductions from the Interim Budget largely reflect the removal of overstated estimates. Capex is projected to be ₹68,382 crore in 2027-28 and ₹83,426 crore in 2028-29, according to the Budget documents.He also underlined the importance of expenditure discipline. “We are seeing a minimum saving of 10 per cent in procurement today compared to what was shown earlier. Some cases even 20 per cent,” he said. Defending the government’s welfare spending, Siddique rejected the characterisation of such schemes as mere “dole-outs”. We need “social, human and physical capital," he said. Published on August 5, 2026
