Tamil Nadu can lead in expenditure reform

Tamil Nadu’s new high-level committee on welfare and public spending has an important task: defining how expenditure is measured and evaluated, and to do so in line with international standards. This could establish a model for reform across India. The reform should reduce leakage, duplication, and low-value spending while creating room for human capital, infrastructure, and technologies needed for future growth.

The State’s June 2026 White Paper shows why this is urgent. In 2024-25, committed expenditure absorbed almost two-thirds of revenue receipts, against 49% in Maharashtra and 45% in Karnataka and Gujarat. Interest payments alone reached almost one quarter of revenue receipts in 2025-26, against 16% in Karnataka, 12% in Gujarat, and 10% in Maharashtra. Capital expenditure was under 1.5% of GSDP, against 1.9% in Karnataka and Maharashtra and 2.9% in Gujarat.

Thus, Tamil Nadu has an expenditure structure more rigid and less investment-oriented than its major peers.