Tamil Nadu government plans to borrow ₹39,000 crore in Q3 of FY2026
October 12, 2025
Tamil Nadu government plans to borrow ₹39,000 crore in Q3 of 2025-26, following RBI's market borrowing schedule.
The Tamil Nadu government plans to borrow ₹39,000 crore in the third-quarter of fiscal 2025-26, as per the indicative market borrowings schedule of States’ released by the Reserve Bank of India (RBI).
States, including Tamil Nadu, raise funds through issue of bonds known as State Development Loans (SDLs). The auction for the bonds is conducted by the RBI. The bonds are issued for various tenures and States have to repay the principal along with interest on maturity. SDLs form a major part of Tamil Nadu’s outstanding liabilities.
The Union government fixes the borrowing ceiling for States. The borrowing ceiling is 3% of the projected Gross State Domestic Product (GSDP) for 2025-26. An additional borrowing of 0.5% of the GSDP is allowed for States, contingent on them undertaking electricity distribution reforms and augmentation of intra-state transmission capacity.
In his Budget speech for 2025-26, Tamil Nadu Finance Minister Thangam Thennarasu said the estimates for receipt and repayment of borrowings had been finalised on the basis of overall borrowing ceiling fixed by the Government of India. The Tamil Nadu government plans to borrow a total amount of ₹1,62,096.76 crore during 2025-26 and make a repayment of ₹55,844.53 crore. As a result, the outstanding borrowing as on March 31, 2026 will be ₹9,29,959.3 crore, he had pointed out.
In Tamil Nadu’s Budget estimates for 2025-26, the Debt to GSDP Ratio was projected to be 26.07%, well within the target of 28.70% prescribed under the 15th Finance Commission. In fiscal 2025-26 (till July), the State’s gross market borrowings stood at ₹31,300 crore as per RBI data. After adjusting for repayments, the net borrowing was ₹17,550 crore.
Till August in fiscal 2025-26, State’s Own Tax Revenue (SOTR), which constitutes 75.3% of Tamil Nadu’s total revenue receipts, stood at ₹74,942.53 crore, when compared to ₹72,098.52 crore in the same period last year, according to the provisional figures from the Comptroller and Auditor General (CAG). For fiscal 2025-26 (till August), Tamil Nadu’s total revenue receipts stood at ₹1,08,460.85 crore, which is 32.71% of the Budget estimates, as per the CAG.
The revenue deficit, which indicates that expenditure is exceeding receipts, was ₹25,686.65 crore so far in fiscal 2025-26 (till August), while the fiscal deficit, the difference between total receipts and total expenditure, stood at ₹37,082.06 crore.
States, including Tamil Nadu, raise funds through issue of bonds known as State Development Loans (SDLs). The auction for the bonds is conducted by the RBI. The bonds are issued for various tenures and States have to repay the principal along with interest on maturity. SDLs form a major part of Tamil Nadu’s outstanding liabilities.
The Union government fixes the borrowing ceiling for States. The borrowing ceiling is 3% of the projected Gross State Domestic Product (GSDP) for 2025-26. An additional borrowing of 0.5% of the GSDP is allowed for States, contingent on them undertaking electricity distribution reforms and augmentation of intra-state transmission capacity.
In his Budget speech for 2025-26, Tamil Nadu Finance Minister Thangam Thennarasu said the estimates for receipt and repayment of borrowings had been finalised on the basis of overall borrowing ceiling fixed by the Government of India. The Tamil Nadu government plans to borrow a total amount of ₹1,62,096.76 crore during 2025-26 and make a repayment of ₹55,844.53 crore. As a result, the outstanding borrowing as on March 31, 2026 will be ₹9,29,959.3 crore, he had pointed out.
In Tamil Nadu’s Budget estimates for 2025-26, the Debt to GSDP Ratio was projected to be 26.07%, well within the target of 28.70% prescribed under the 15th Finance Commission. In fiscal 2025-26 (till July), the State’s gross market borrowings stood at ₹31,300 crore as per RBI data. After adjusting for repayments, the net borrowing was ₹17,550 crore.
Till August in fiscal 2025-26, State’s Own Tax Revenue (SOTR), which constitutes 75.3% of Tamil Nadu’s total revenue receipts, stood at ₹74,942.53 crore, when compared to ₹72,098.52 crore in the same period last year, according to the provisional figures from the Comptroller and Auditor General (CAG). For fiscal 2025-26 (till August), Tamil Nadu’s total revenue receipts stood at ₹1,08,460.85 crore, which is 32.71% of the Budget estimates, as per the CAG.
The revenue deficit, which indicates that expenditure is exceeding receipts, was ₹25,686.65 crore so far in fiscal 2025-26 (till August), while the fiscal deficit, the difference between total receipts and total expenditure, stood at ₹37,082.06 crore.