T.N.’s outstanding liability from bonds stood at ₹5.38 lakh crore as of March

Tamil Nadu had an outstanding liability of about ₹5.38 lakh crore at the end of March 2023 on funds raised through the issue of bonds. About 38.5%, or ₹2.07 lakh crore, of the outstanding amounts are coming up for repayment in 1-5 years.

As per a report of the Reserve Bank of India (RBI), State Finances: A Study of Budgets of 2023-24, 28.6% of the outstanding amount was coming up for repayments in 5-10 years. Of the outstanding liability from the issue of bonds at the end of March 2023, 16.4% matures after 20 years, 9.7% between 10-20 years and 6.9% within a year.

To bridge the gap between income and expenditure (fiscal deficit), Tamil Nadu borrows from the market through the issue of State Development Loans (SDLs), which form a major part of the State’s total outstanding liabilities.

According to the data shared in the RBI report, SDLs account for about ₹6 lakh crore of the State’s total outstanding liabilities of about ₹8.34 lakh crore estimated at the end of March 2024.

At the end of March 2023, the total outstanding liabilities stood at ₹7.41 lakh crore and SDLs accounted for about ₹5.18 lakh crore.

Besides SDLs, the remaining components of liabilities include obligations from Ujjwal DISCOM Assurance Yojana (UDAY) bonds and loans from financial institutions and the Centre.

In 2022-23, Tamil Nadu’s gross borrowing was ₹87,000 crore. The gross market borrowings of States/Union Territories increased by 8.1% to ₹7.58 lakh crore during 2022-23 from ₹7.02 lakh crore a year ago, the RBI said.

States’ net market borrowings increased by 5.4% to ₹5.19 lakh crore in 2022-23 from ₹4.92 lakh crore in 2021-22, it added. In 2023-24 (till September), Tamil Nadu’s gross borrowing stood at ₹53,000 crore and net borrowings, ₹31,680 crore. In October 2023, Finance Minister Thangam Thennarasu told the Assembly that the total borrowing ceiling for States in 2023-24 was fixed at 3.25% of the Gross State Domestic Product (GSDP). The State government strives to manage the debt to GSDP ratio within the prescribed limits, he had said.