Sun Oct 12 12:59:35 UTC 2025: **Summary:**

The Tamil Nadu government plans to borrow ₹39,000 crore in the third quarter of fiscal year 2025-26 through State Development Loans (SDLs). This borrowing is within the limits set by the Union government, based on a percentage of the state’s Gross State Domestic Product (GSDP). The state’s fiscal situation shows a revenue deficit and a fiscal deficit, but the Debt to GSDP Ratio remains within the target set by the 15th Finance Commission. State’s Own Tax Revenue (SOTR) has increased compared to the previous year, and total revenue receipts are at 32.71% of the Budget estimates.

**News Article:**

**Tamil Nadu to Borrow ₹39,000 Crore in Q3 Amid Fiscal Deficits**

**CHENNAI, October 12, 2025** – The Tamil Nadu government is set to borrow ₹39,000 crore in the third quarter of fiscal year 2025-26, as announced by the Reserve Bank of India (RBI) in its indicative market borrowings schedule. This borrowing will be facilitated through the issuance of State Development Loans (SDLs), a common method for states to raise funds.

The borrowing falls within the ceiling fixed by the Union government, calculated as 3% of Tamil Nadu’s projected Gross State Domestic Product (GSDP) for 2025-26, with an additional 0.5% possible pending electricity distribution reforms.

According to Finance Minister Thangam Thennarasu’s budget speech, Tamil Nadu plans to borrow a total of ₹1,62,096.76 crore during the fiscal year, with repayments of ₹55,844.53 crore anticipated. This would bring the outstanding borrowing to ₹9,29,959.3 crore by March 31, 2026.

While the state’s Debt to GSDP Ratio is projected to be 26.07%, remaining within the 15th Finance Commission’s prescribed limit of 28.70%, the state faces a revenue deficit of ₹25,686.65 crore and a fiscal deficit of ₹37,082.06 crore as of August 2025.

On a positive note, Tamil Nadu’s Own Tax Revenue (SOTR) has seen an increase compared to the previous year, reaching ₹74,942.53 crore. Total revenue receipts stand at ₹1,08,460.85 crore, representing 32.71% of the Budget estimates.

The Tamil Nadu government aims to balance its development needs with responsible fiscal management as it navigates the remainder of the fiscal year.

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