Tamil Nadu’s former Chief Secretary Okay. Shanmugam has referred to as for a balanced strategy between improvement and welfare in governance of the State.
Addressing college students at a panel dialogue on the maiden funds introduced by the Tamilaga Vettri Kazhagam for 2026-27 on the Madras Institute of Improvement Research on Friday, Mr. Shanmugam, who was the State authorities’s Finance Secretary from 2010 to 2019, stated that at the same time as Tamil Nadu had been “a mannequin for welfare state,” it didn’t neglect the significance of improvement.
The earlier governments, whatever the get together, had executed an exquisite job within the areas of well being, training, infrastructure improvement, and the availability of fundamental facilities in villages, he stated.
“However, then someplace across the similar interval, we had began shrinking our ideas, and we had began wanting on the political dividends, greater than welfare. Until a selected level of time, previous to the launch of any scheme, an intensive dialogue was held between politicians and officers, and the top goal was outlined. The top goal was not political at the moment. It has modified over a time period,” Mr. Shanmugam stated.
Emphasising that “borrowing per se is nice but it surely needs to be inside limits,” the previous Chief Secretary stated that when the borrowed cash was deployed for capital expenditure, “this creates an excellent base for the economic system to maneuver ahead; generate employment and future revenue additionally.” The debt to GSDP past some extent could be “regressive on financial development, particularly when such borrowed funds are largely used on income expenditure,” which he steered, be saved underneath management.
Former Director of Madras Faculty of Economics, Okay.R. Shanmugam, additionally the financial guide to the State authorities, stated the funds struck a “steadiness between welfare and financial prudence.” It had given priorities to talent improvement and rural and concrete improvement, whereas persevering with most of ongoing welfare schemes.
A number of the current schemes had rebranded with greater fund allotment. Additionally, the statutory requirement of conserving fiscal deficit at 3 per cent of the Gross State Home Product had additionally been maintained.
On the macro fiscal indicators, Dr. Shamugam stated that although fiscal deficit was being managed at about 3%, income deficit had been on the rise and the truth that it was about 1.4% of GSDP meant that fifty% of the borrowed cash was spent on consumption and never on funding.
Describing the current degree of proportion of excellent liabilities to the GSDP which stood at about 27% throughout 2025-26 as “unsustainable,” the veteran academician stated the permissible degree for the State could be 23% though the N.Okay. Singh panel on Fiscal Duty and Funds Administration Act had beneficial it to be 20%.
If the State ensured greater financial development (nominal) at 15% and decreased fiscal deficit by 1%, this could convey debt to a sustainable degree within the brief run. The State, which had suffered a better degree of debt that had been attributable to the COVID-19 pandemic, might strategy the Centre to supply a debt aid scheme, Dr. Shanmugam stated.
The Hindu’s senior affiliate editor T. Ramakrishnan spoke on the free energy provide scheme for farmers, huts and the home class.
Printed – August 16, 2026 12:43 am IST
