TN borrowed ₹12,044 crore in July as spending outpaced revenue

Chennai, Aug 22 (AHN) The Tamil Nadu government borrowed ₹12,044 crore through bond issues in July alone as expenditure continued to exceed revenue during the first four months of the current financial year, according to fiscal data.

The figures have emerged more than 100 days after the Tamilaga Vettri Kazhagam (TVK) government assumed office and presented its first Budget in the Assembly.

Voters who backed a change in government had expected a corresponding shift in governance, but the latest borrowing numbers have brought the State’s financial position into focus.

Between April and July, Tamil Nadu recorded total receipts of ₹89,718 crore. Tax revenue accounted for the largest share at ₹82,566 crore, while non-tax revenue stood at ₹4,070 crore.

Grants from the Union government contributed another ₹3,082 crore.

The State raises revenue through sources including the State Goods and Services Tax, stamp duty and registration fees, land-related receipts, sales and commercial taxes, State excise duty, its share of central taxes, other duties and non-tax income.

It also receives grants from the Union government. However, total expenditure during the April-July period reached ₹1.23 lakh crore, leaving a revenue deficit of ₹25,267 crore.

Interest payments on existing loans formed one of the biggest expenditure components, amounting to ₹21,176 crore.

Pension payments accounted for another ₹17,237 crore. With spending running higher than income, the government has continued to rely on market borrowing to finance welfare programmes, development projects and other commitments.

Funds are typically raised by issuing government securities and borrowing through banks and other authorised channels.

Tamil Nadu’s total borrowing during the first four months of the financial year stood at ₹32,925 crore. The cumulative figure up to June was ₹20,881 crore, indicating that the State added ₹12,044 crore to its debt in July alone.

Borrowing was also higher than in the corresponding period of the previous financial year. Between April and July 2025, the government had earned total revenue of ₹85,876 crore and incurred expenditure of ₹1.09 lakh crore.

Borrowing during those four months amounted to ₹30,956 crore. The latest data show that while government revenue improved year-on-year, expenditure and borrowing also increased.

The widening gap is likely to intensify scrutiny of the new administration’s fiscal strategy, particularly its ability to fund promised schemes while controlling debt, interest liabilities and the persistent revenue deficit.