With a revenue deficit of ₹78,324 crore, an outstanding debt exceeding ₹10 lakh crore, and the own-tax-to-GSDP ratio at 5.45%, Tamil Nadu’s core challenge is not that it borrows too much; it is that it collects and spends less efficiently than comparable large States, says a recently released Kearney report on ‘Tamil Nadu’s Fiscal Crossroads’.

“Cautiously estimated, narrowing this gap can add more than ₹1.2 lakh crore of annual fiscal capacity without new taxes or additional borrowing, through better compliance, valuation, monitoring, and project discipline,” the report says.

“The opportunity is not merely to narrow a deficit; it is to restore the State’s capacity to invest confidently in infrastructure, human development, and competitiveness that its next phase of growth demands,” the study added. Better collection of revenue, sharper prioritisation, and more disciplined execution can create a conducive environment to fund growth, welfare, and fiscal prudence.

Report’s recommendations

Based on a study of Tamil Nadu’s GST collections, excise revenue, stamp duty and registration charges, mining royalties and receipts, grants in aid, and revenue and capital expenditure, the report recommends fixing the first-year targets by the State government for GST compliance, guideline-value revision, grant drawdown, mining reconciliation, procurement competition, and capital project readiness, and link departmental accountability to delivery.

Tamil Nadu’s GST-to-GSDP ratio is the lowest when compared to Maharashtra, Gujarat, and Karnataka. A combination of a large, comparatively affluent consumption base, paired with the weakest GST realisation among peers, points to a meaningful opportunity to lift collections, both by bringing a greater share of economic activity into the formal, GST-compliant fold and by tightening enforcement against existing leakages rather than raising rates.

Tamil Nadu’s Statewide guideline revisions were done in 2002, 2007, 2012, and 2017, and the next one took effect on July 2, 2024. Meanwhile, across-the-board increase was struck down by the Madras High Court in January 2024 and the State has moved to a more granular “composite value” system. States that pair periodic revision of guideline value with finer geographic granularity and use of actual registered-transaction data appear to sustain a steadier stamp-duty-to-GSDP ratio over time. Consistent enforcement of registration-below-guideline-value referrals will matter as much as the revision cadence itself, the study said.

On excise revenue, the study said enabling wider availability of premium and semi-premium alchohol products, paired with a distinct, higher excise rate for those categories, will allow Tamil Nadu to capture more revenue from consumers who are already trading up without increasing overall consumption.

As for mining receipts, it said the State can directly rationalise rates for minor minerals. For other minerals, its most immediate avenues are accurate measurement, transparent auctions, and assessment and recovery, rather than the rate itself.

“There are significant opportunities to improve procurement efficiencies through improved competition leading to better price discovery. The State has also been slower compared with other States in mobilising private capital through PPP projects, specifically in infrastructure,” the study said.

The two women Ministers and MLAs of the ruling Tamilaga Vettri Kazhagam (TVK) attended the Assembly on Monday clad in red-tinted saffron sarees to mark the day Chief Minister C. Joseph Vijay replied to the debate on demands for grants for the Police and Fire and Rescue Services departments.

After the Chief Minister completed his speech, they met him and appreciated his performance.

The Tamil Nadu Legislative Assembly on Friday yet again witnessed a debate over the State government’s decision to buy new cars for MLAs.

The topic became a point of discussion after DMK MLA G.V. Markandayan said the TVK government, which promised “change”, should focus on implementing their promises such as ₹2,500 per month for women, and providing six domestic LPG cylinders free of cost among others, instead of providing cars to the MLAs.

Responding to this, Law Minister C.T.R. Nirmal Kumar said the cars were being provided so that MLAs could visit the length and breadth of their constituencies, and alleged that he had been told by people in villages that Mr. Markandayan had never met them.

Health Minister K.G. Arun Raj said it had been only 100 days since the TVK had formed the government but the Chief Minister [C. Joseph Vijay] has been implementing his promises.

Poll promises

“Today, we are giving approvals to building construction without taking money/square foot. How are you saying there is no change? Despite knowing why finances were bad, why did you [erstwhile DMK government] say you will build a “Pen” memorial [at the Marina, in memory of late Chief Minister M. Karunanidhi]?” he asked.

On his part, Revenue Minister K.A. Sengottaiyan questioned the DMK for organising the “car race” (Formula 4 night race) in August/September 2024. To this, DMK deputy floor leader K.N. Nehru, said the former Sports Minister (Udhayanidhi Stalin) organised several sporting events such as chess, hockey competitions and also the car-racing event.

Mr. Udhayanidhi responded: “Our leader [former Chief Minister M.K. Stalin] said that whoever [MLA] needed a car, can be given one. The DMK legislators need not be given cars. There is now a debate on car racing. It was an international race. We organised a night race for the first time in Asia. We did it. At the time, many went to court saying it was not safe. But the court allowed it. You are not belittling us, you are belittling motor sport racers.”

Minor tension prevailed at Kaniyur near Coimbatore on Wednesday evening when the cadre of the Tamilaga Vettri Kazhagam assembled for an event arranged for the party’s Sulur MLA N.M. Sukumar to thank voters for his victory in the Assembly election. A woman functionary, Vasanthi, alleged that she was pushed by party workers who accompanied the MLA. Mr. Sukumar denied the allegation and told media persons on Thursday that supporters who accompanied him were not involved in the incident.

The Supreme Court on Tuesday (July 7, 2026) said restraining Tamilaga Vettri Kazhagam (TVK) leaders from making public statements linking political rivals with the Karur stampede may amount to an injunction on “free speech.”

The court advised the Opposition Dravida Munnetra Kazhagam (DMK) to counter such statements with “more speech”, rather than seek a judicial gag.

The remarks by a Bench headed by Justice K.V. Viswanathan came during the hearing of an application filed by DMK Organising Secretary R.S. Bharathi, alleging that TVK leaders, including Aadhav Arjuna, were publicly making false accusations of criminal liability and issuing “threats” against political opponents in connection with the Karur stampede. Mr. Bharathi had also sought to be impleaded as a party in the Karur stampede case pending before the Supreme Court.

The tragedy left 41 people dead and 142 injured during a TVK rally on September 27 last year. The apex court had ordered a CBI investigation into the stampede on October 13, 2025. The probe is continuing, and some TVK leaders have been named as accused.

Senior advocate Ranjit Kumar, appearing for Mr. Bharathi, said TVK leaders, including Mr. Arjuna, who is also an accused in the stampede case under CBI investigation, should be restrained from making public statements on the case during the pendency of the investigation.

“That may amount to an injunction on free speech. Mr. Kumar. Which law sanctions it? You also make your speeches, you counter free speech with more speech,” Justice Viswanathan remarked.

The Bench questioned the propriety of entertaining the impleadment plea of a political rival in a case in which it had ordered a CBI investigation and was monitoring its progress. Justice Viswanathan said the court could not be converted into a political forum and that political battles must be fought outside the courtroom.

Further, Mr. Kumar objected to Tamil Nadu Chief Minister C. Joseph Vijay’s proposed visit to Karur on July 10 to meet the families of the stampede victims and hand over compassionate appointments. He said the State government had already announced an ex gratia payment of ₹10 lakh to the affected families.

Mr. Kumar said a “narrative is being built by the accused persons. I am not against the compensation, I am against compensation being given directly by the accused to the families, who are also witnesses in the case,” the senior advocate said.

The court said Mr. Vijay was arraigned as an accused neither in the FIRs nor in the DMK’s own application.

“You please check up on your facts,” Justice Viswanathan said.

The judge asked how the Supreme Court was expected to “regulate the itinerary” of the Chief Minister.

“If the Executive Head is travelling to merely distribute what has already been ordered for the victims by the State government, how will the victims be influenced? Does it not really reflect your thoughts on the victims?” Justice Viswanathan asked, expressing doubt whether the application was “well-thought through” in the first place.

Acting on instructions, Mr. Kumar withdrew the application.

Solar energy producers are looking for changes in a couple of key policy issues to boost renewable energy generation in Tamil Nadu. Networking charges, deemed demand charges and approvals for installation of the solar energy panels are some of the issues that needs attention, say the investors in solar energy sector.

Some of the projects, which were approved a couple of months ago and were almost ready for installation, were kept in abeyance. Hence, a section of investors moved the court and got a stay on the order on keeping the approvals for commissioning the project in abeyance. Resolution of the issue began after it was taken up with the Minister concerned. The projects are currently reviewed on a case-to-case basis and approved, according to sources.

Notably, a solar energy project goes through seven stages, from land acquisition to commissioning, and takes about three months. The entire process should be made seamless. Further, networking charges for rooftop solar energy generators are another major deterrent to solar investments. The charges should be removed, they added.

On deemed demand charges, the investors pointed out that it is a long-pending issue that was taken to the Supreme Court and the Apellate Tribunal for Electricity. The State government should give relief to investors in renewable energy sector. This will also encourage more companies to invest in renewable energy, they said.

The government should also encourage hybrid renewable energy generation projects. This will help the investors save on land investments and approval costs, they added.

Over 50 years ago, Lakshmi used to walk from Thiru. Vi.Ka. Nagar to Pulianthope near Basin Bridge, carrying large brass pots of water on her head.

On a hot afternoon, holding a pail of water fetched from a tanker, her daughter-in-law, Abirami, says the situation remains largely unchanged for residents. She wipes off her sweat and slowly proceeds up a flight of stairs to her home and returns shortly after to refill. “I am afraid that my children will also face this situation,” she said.

While neighbouring areas such as Sastri Nagar and Narasimha Nagar, and newly constructed apartment complexes receive continuous piped water, six streets of Thiru.Vi.Ka. Nagar rely entirely on lorry-filled tanks. The heat, this summer, has exacerbated their situation.

Residents continue to manually carry water to their homes. There is no water supply in the hand pumps installed in some homes, and even if there is water, it is available only at 4 a.m. and is of poor quality, they say. The situation has remained the same even after officials inspected the area and promised action in March.

Jansi, a hospital contract worker residing in the area, said, “There are no borewells here. Families need at least 12 pots of water a day for basic necessities, forcing us to run from street to street after work. The pumps installed 15 years ago remain non-functional. During the summer, water scarcity intensifies, while during the monsoon, the streets experience severe waterlogging.”

“Families with school-going children face immense hardship as daily routines such as bathing depend entirely on successfully drawing water from these tanks, a struggle that only worsens during the summer,” she added.

Abirami, who underwent a caesarean section, said she suffers physical strain from carrying water to her first-floor residence. “The water comes out muddy and black, like sewage, emitting a foul smell. Even children are forced to help carry water, which disrupts their studies. Daily wage workers often miss work as they have to wait for the water lorries, whose timings are entirely unpredictable,” she said.

Water sources

There are nearly 200 temporary water tanks in the locality, which have become the only water source, said Selvaraj of Pulianthope Podhu Nala Sangam.

He said that connecting the area’s network to a dedicated main pipeline situated 100 to 150 metres away would provide a permanent solution. “Authorities claim that our water comes from the Kilpauk area, but there is no pressure, and blockages are frequent. Connecting to the continuous main line is the only way to resolve a struggle that has persisted for decades,” he said.

“A permanent solution means continuous flow of water. Thiru.Vi.Ka. Road and Sastri Nagar have continuous supply without a single tank, while our streets are filled with them. Elected representatives have not taken any initiative for a permanent solution. We want household pipe connections, yet, despite government schemes such as Jal Jeevan, no steps have been implemented,” he said.

Officials of the Chennai Metrowater Department said, “We are looking into the issue of erratic supply in Thiru.Vi.Ka Nagar pocket and Ambedkar Nagar 4th street. We have decided to begin from the Kilpauk Water Distribution Station supply to check if there are leakages in the supply side, since we have optimal pressure in major valves. We also have an elaborated action plan to tackle water pollution. The issue is being handled.”

Thiru.Vi.Ka Nagar MLA M.R. Pallavi said she would hold a meeting with the residents regarding the issue and ensure officials take necessary action soon.

As part of the ongoing investigation into the theft of 18 hard disks from the Tamil Nadu Power Distribution Corporation Limited (TNPDCL) headquarters on Anna Salai in Chennai, the Greater Chennai Police (GCP) have arrested a contract employee and intensified efforts to uncover the larger network behind the incident.

A special team arrested Gopinath, 36, of Arakkonam in Ranipet district on Thursday. He is currently being questioned at a secure location as investigators pursue further leads in the case. The police said Gopinath was employed on contract by a private information technology firm responsible for the annual maintenance of computer systems at the TNPDCL headquarters. During interrogation, he allegedly confessed to removing the hard disks at the behest of certain key suspects.

Meanwhile, Minister for Energy Resources and Law R. Nirmalkumar said instructions had been issued to ensure the safe custody of all files and to take backup copies of data stored in computers. Speaking to journalists at the Secretariat, he said 18 hard disks had been reported missing from the TNPDCL headquarters last month. Later, he said the police had made some arrests in Bengaluru where the hard disks were taken to.

Following a preliminary departmental vigilance inquiry, a complaint was lodged with the police. Investigators said Gopinath had been communicating with the key suspects through online calls and later handed over the devices in exchange for money.

Investigators suspect that individuals linked to contractors and beneficiaries involved in procurement and tender-related activities may have orchestrated the theft.

Police believe the hard disks could have been targeted to obtain sensitive information related to contracts and purchases.

As part of the probe, officers have collected details of contractors and vendors associated with the State electricity utility, and are examining their possible connections with Gopinath and other suspects. Call detail records and digital communication trails are being analysed to establish the chain of events. Two additional suspects are being questioned to determine their involvement and identify others who may have played a role in the theft.

Meanwhile, the GCP have expanded the scope of the investigation and sought assistance from experts in the Cyber Crime Wing.

Cyber forensic specialists have been tasked with examining digital evidence and tracing the movements, communications, and online activities of those suspected to be connected to the case.

Data in transformer procurement case

Mr. Nirmalkumar said all information regarding the alleged scam in transformer procurement had already been handed over to the Central Bureau of Investigation (CBI) in connection with an ongoing case. He said certain persons had also been placed under suspension in connection with the matter.

He said the process of backing up data related to tenders issued over the past five years, coal contracts, and contract employee-related records stored in computers had commenced. The validation process was expected to be completed within a few days.

Reacting to the incident, AIADMK general secretary Edappadi K. Palaniswami on Thursday demanded that the CBI be asked to probe the alleged theft of hard disks. “How should we interpret the disappearance of the data under a regime that claimed itself to be a ‘clean force’?” Mr. Palaniswami asked, in a post on his social media handle. He also asked the government whether it was trying to “shield” a party that it had once derided.

BJP Tamil Nadu unit president Nainar Nagenthran said the alleged theft of the hard disks from the TNPDCL headquarters showed the current regime’s inefficiency.

Former Electricity Minister and DMK Coimbatore South MLA V. Senthilbalaji on Thursday told journalists in Coimbatore that if hard disks had gone missing from the TNPDCL headquarters, then it is the duty of the government and the Minister and the official concerned to take action against the staff involved. “It is a departmental issues. If someone commits a mistake, it is your responsibility to take action,” he told journalists in Coimbatore.

When a journalist contended that Mr. Nirmalkumar had said there was an attempt to intimidate him on the issue, Mr. Senthilbalaji wondered about the state of law and order when a Minister himself was facing intimidation.