State Budget
Tamil Nadu Budget pegs FY26 fiscal deficit at 3% of GSDP, capex to rise 22%
This story was originally published at 13:59 IST on 15 March 2025
Register to read our real-time news.Informist, Saturday, Mar. 15, 2025
By Shubham Rana
NEW DELHI – Tamil Nadu's Budget for 2025-26 (Apr-Mar), presented on Friday, has projected an improvement in the state's finances even as capital spending continues to rise. The state has pegged a fiscal deficit of 3.00% for FY26, lower than the revised estimate of 3.26% for the current year.
The state's fiscal deficit had risen to a high of 4.91% in the pandemic-hit FY21 but has slowly moderated since then. The fiscal deficit was 3.32% in FY24. The state's revenue deficit is also seen falling to 1.17% in FY26 from the revised estimate of 1.49% for FY25. The outstanding debt of the state is also seen inching lower to 26.07% of gross state domestic product next year from 26.43% of GSDP in FY25.
Even as the state government is targetting a lower fiscal deficit, its capital expenditure is projected to rise in FY26. Tamil Nadu's Budget has pegged the capital expenditure for FY26 at INR 572.31 billion, a 22.4% jump from the current year's revised estimate of INR 467.66 billion.
The Budget announced the development of a new airport in the Rameshwaram area of Ramanathapuram district. The southern state will also launch the 'Tamil Nadu Semiconductor Mission-2030' over the next five years with an estimated allocation of INR 5 billion.
The revenue expenditure of the state is seen rising 9.7% on year to INR 3.73 trillion next year. In terms of sectoral allocations, the government has assigned INR 552.61 billion for education, INR 343.96 billion for urban development, and INR 294.65 billion for rural development in the FY26 Budget.
On the revenue front, the Tamil Nadu's revenue receipts are seen rising 12.8% on year to INR 3.32 trillion in FY26. Revenue from the state's own taxes are estimated to increase by 14.6% in FY26. The state's own revenues constitute 75.3% of the total revenue receipts. End
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
