Why PTR rejected TN govt's White Paper on state's finances | Interview

Tamil Nadu’s new government has released a White Paper on the state’s finances, triggering a political and economic debate over the state's fiscal condition. While the government says the document provides an honest assessment of the finances it inherited from the previous DMK administration, in an exclusive interview with The Federal's sister concern, Puthiya Thalaimurai, former Finance Minister PTR Palanivel Thiagarajan questioned both its findings and methodology.

Released by Finance Minister N Marie Wilson on June 16, the White Paper examines Tamil Nadu’s finances between 2021-22 and 2025-26. It claims the state's outstanding liabilities nearly doubled from Rs 5.13 lakh crore in 2021 to around Rs 10 lakh crore by March 2026.

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The report further states that when borrowings by public sector undertakings are included, Tamil Nadu’s total debt burden exceeds Rs 13 lakh crore.

Fiscal concerns

The White Paper identifies six major concerns: rising debt, increasing interest payments, a growing revenue deficit, weakening tax collections, rising committed expenditure and higher contingent liabilities.

According to the report, Tamil Nadu’s revenue deficit touched a record Rs 78,324 crore in 2025-26, while per-capita liability rose to nearly Rs 1.29 lakh. It also argues that the state's debt-to-GSDP ratio remained significantly higher than that of comparable states such as Gujarat, Maharashtra and Karnataka.

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The government has said the document is intended to provide a transparent and evidence-based assessment of the state's finances and serve as a roadmap for corrective measures through better revenue mobilisation and administrative reforms.

Wilson attributed the situation partly to revenue leakages in key sectors. "There are leakages in TASMAC, mining and land registration. All these sectors were affected by corruption and revenue leakages. Those were among the reasons that led us to this situation and necessitated the issuance of the White Paper," he said.

PTR's objections

However, PTR has strongly disputed the report's credibility.

PTR compared the latest White Paper with the one he released in 2021 after the DMK came to power. According to PTR, his report examined Tamil Nadu's financial history over 15 years, whereas the current document focuses only on the last five years.

He also questioned the timing of the report's release, arguing that a comprehensive financial assessment requires detailed study and analysis. PTR maintained that the latest White Paper appeared rushed and contained several errors and inconsistencies.

One of his main criticisms was that the report used different time periods for different comparisons. He argued that debt figures were compared over five years, while investment figures were compared over four years, resulting in a misleading picture.

"The calculations are highly flawed; in some places, they take a five-year period, and in others, they take a four-year period. This is either the pinnacle of incompetence or sheer malice," PTR said.

Revenue debate

He also questioned the revenue deficit figures presented in the White Paper. He said the DMK government inherited a higher revenue deficit in 2021 than what was being claimed in the report.

PTR further stated that the deficit was significantly reduced during his tenure through structural reforms and fiscal measures. He described that period as a strong phase of fiscal management for the state.

Emphasising the importance of revenue generation, he argued that improving collections reduces borrowing requirements and interest costs while creating more room for welfare spending.

"The revenue percentage must be corrected. If you fix it, your borrowing decreases, your interest burden reduces and you can utilise those funds for additional welfare schemes and benefits," he said.

Political battle

The White Paper also projects significant fiscal challenges in the years ahead. It argues that current revenue projections may be overly optimistic and warns that both the revenue deficit and fiscal deficit could exceed Budget estimates if current trends continue.

The ruling TVK government has maintained that the document presents an honest assessment of Tamil Nadu’s finances and is necessary to guide future policy decisions. The DMK, meanwhile, has rejected the report's conclusions and accused the government of selectively presenting data.

As the debate intensifies, the White Paper has become the centre of a broader discussion about Tamil Nadu's fiscal health, governance priorities and economic direction. With both sides standing firm, the argument over the state's finances is likely to continue in the months ahead.

(The content above has been transcribed from video using a fine-tuned AI model. To ensure accuracy, quality, and editorial integrity, we employ a Human-In-The-Loop (HITL) process. While AI assists in creating the initial draft, our experienced editorial team carefully reviews, edits, and refines the content before publication. At The Federal, we combine the efficiency of AI with the expertise of human editors to deliver reliable and insightful journalism.)