EconomyMonday, 28 September 2026·The Hindu - Economy
Tamil Nadu fiscal capacity: Kearney study flags low GST realisation, ₹10 lakh crore debt
A Kearney report says Tamil Nadu can add over ₹1.2 lakh crore in annual fiscal capacity through better compliance and execution.
Key highlights
Direct fact
In 2026, Kearney’s report on Tamil Nadu’s fiscal position cited a revenue deficit of ₹78,324 crore, outstanding debt above ₹10 lakh crore, and an own-tax-to-GSDP ratio of 5.45%.
Key specifics
- Revenue deficit: ₹78,324 crore, as cited in the Kearney report.
- Outstanding debt: exceeding ₹10 lakh crore in Tamil Nadu.
- Own-tax-to-GSDP ratio: 5.45%, described as low compared with peers.
- Potential fiscal capacity gain: more than ₹1.2 lakh crore annually without new taxes or extra borrowing.
- Guideline-value revisions in Tamil Nadu: 2002, 2007, 2012, 2017, and the next one effective from July 2, 2024.
Exam lens
State economy and fiscal management MCQ focus: revenue deficit, debt, own-tax-to-GSDP ratio, guideline-value revision years, and the July 2, 2024 composite value system; TNPSC may ask how better compliance and valuation can raise fiscal capacity.