K Annamalai, founder of the “We The Leader” (Idhu Namma Iyakkam) movement, has urged Tamil Nadu’s newly formed Tamilaga Vettri Kazhagam (TVK)-led government to set up a functional consultation group of academicians, economists and sector experts to tackle the state’s deepening fiscal crisis. Citing the financial deterioration outlined in the TVK government’s White Paper, Annamalai urged officials to treat the report as a clear roadmap for repair rather than using it as justification for inaction.

Tamil Nadu’s recently released White Paper on the state’s finances has emerged as a stark financial reckoning, exposing what the TVK-led government describes as five years of fiscal mismanagement under the previous administration. The document lays bare a deteriorating fiscal picture, with the state carrying an outstanding debt of Rs 10 lakh crore and per capita debt at Rs 1,28,934, while interest payments now consume 22.8% of total revenue receipts.

The state’s own tax revenue to GSDP ratio has slipped from 5.93% in 2021–22 to 5.45% in 2025–26, signalling a weakening revenue base relative to economic output. Major public sector undertakings in power, transport and civil supplies hold a combined debt of Rs 3.18 lakh crore, and the White Paper points to systemic corruption—including undervaluation of real estate prices to suppress registration revenues—as a key driver of revenue loss. The situation is compounded by a projected decline in the working-age population by 2031, which will further constrain the state’s capacity to boost earnings and service debt.

White Paper exposes five years of fiscal mismanagement

Former Tamil Nadu BJP chief Annamalai has launched a grassroots movement, Idhu Namma Iyakkam (We The Leader), to challenge established parties and mobilise citizens around local accountability. Meanwhile, multiple politicians from various parties are defecting to join the new TVK-led outfit and Annamalai’s movement, signalling a shifting political landscape in the state.

In a post on X, Annamalai said he reviewed the White Paper on Tamil Nadu’s finances and found “no surprises,” noting that much of the information was already known. He described the document as “a post-mortem of the State’s fiscal mismanagement over the past five years,” which lays bare the extent of deterioration and benchmarks Tamil Nadu’s key financial indicators against those of other similarly industrialised states.

Key fiscal indicators highlight deepening crisis

The White Paper outlines several alarming figures that underscore the state’s financial distress:

  • Outstanding debt of Rs 10 lakh crore, with per capita outstanding debt at Rs 1,28,934
  • Interest payments consuming 22.8% of total revenue receipts
  • State’s own tax revenue (SoTR) to GSDP ratio falling from 5.93% in 2021–22 to 5.45% in 2025–26
  • Major state PSUs in power, transport and civil supplies holding a combined debt of Rs 3.18 lakh crore
  • Significant revenue loss due to systemic corruption, including suppression of registration revenues through undervaluation of real estate prices

These indicators reveal a revenue base that is shrinking relative to economic output, while debt-servicing costs are eating into a large share of the state’s earnings.

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Urgent action needed as working-age population shrinks by 2031

Annamalai highlighted another critical long-term challenge: Tamil Nadu’s working-age population is expected to shrink by 2031, leaving the state with very little time to recover and strengthen its revenue base. “This is a serious issue!” he wrote, stressing the urgency of addressing the fiscal imbalance before demographic trends further constrain the state’s capacity to generate income.

Call for functional consultation group to mitigate crisis

In response, Annamalai urged the TVK government to act swiftly. “The TVK govt., therefore, has very little time at its disposal and must not treat this White Paper as an excuse for non-performance; instead, it should explore ways to repair the damage done,” he said in a social media post.

He proposed the formation of a functional consultation group that includes not only academicians and economists but also experts from all fronts to find constructive ways to mitigate the crisis. The move signals growing public and activist concern over Tamil Nadu’s fiscal trajectory, with the White Paper serving as a stark business and finance warning that significant policy corrections are needed to restore the state’s financial health and sustain long-term economic growth.

Annamalai have called for the formation of a functional consultation group of experts to help the new government repair the damage, treat the White Paper as a roadmap for fiscal correction, and avoid using it as an excuse for non-performance. The White Paper, therefore, is not just a post-mortem of past fiscal errors but a critical business and policy warning that Tamil Nadu must urgently restore revenue strength, reduce debt-servicing burdens and improve fiscal discipline to safeguard its long-term economic stability.