Tamil Nadu faces fiscal stress and revenue leaks, CAG reports

The Comptroller and Auditor General of India (CAG) has identified significant fiscal pressures and revenue leakages within Tamil Nadu. According to seven reports presented to the State Legislative Assembly, while the state recorded a GSDP growth of 15.98%, it faced a revenue deficit of Rs 45,840 crore for the 2024-25 period.

The audit highlighted that a substantial portion of borrowings was directed toward debt servicing and revenue expenditure rather than asset creation. Additionally, revenue arrears reached Rs 58,110.16 crore as of March 31, 2025, with over Rs 28,726 crore outstanding for more than five years.

Specific operational failures were noted in the Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO). The CAG reported a revenue loss of Rs 385 crore in 2022-23 due to incorrect billing methods for high-tension consumers. The report also cited avoidable expenditures of Rs 48 crore on conductor procurement and Rs 21 crore on insulators due to procurement delays and failure to compare market rates. The CAG recommended tighter monitoring, improved revenue realization, and greater accountability across state-owned enterprises and welfare programs.