CHENNAI: In a rejoinder to fellow Congress leader’s critique of Tamil Nadu’s finances, former Union Finance Minister P Chidambaram on Thursday asserted that assessing a state’s financial health solely based on its total debt is fundamentally flawed, as such comparisons ignore broader economic realities.
In a statement, Chidambaram said that rising public debt is a global phenomenon and should not be selectively used to criticise individual states, such as Tamil Nadu. His remarks came against the backdrop of political controversy triggered by earlier comments from Congress leader and data analyst Praveen Chakravarty, who had criticised Tamil Nadu’s rising debt levels compared to Uttar Pradesh.
Developed economies such as the United States, the United Kingdom, Japan, France, and Canada continue to see annual increases in their overall public debt, Chidambaram noted.
The same trend is visible in India as well. Both the country’s total debt and the combined debt of all states rise every year. This, by itself, is not abnormal,
Chidambaram
According to the former Union Finance Minister, the correct indicator for assessing financial health is not the absolute level of debt but the debt-to-Gross Domestic Product (GDP) ratio. “That is the accepted and meaningful
The correct indicator for assessing a State’s financial health is not the absolute level of debt but the debt-to-Gross Domestic Product (GDP) ratio. TN’s debt-to-GSDP ratio has remained stable from 2021–22 through 2025–26. This commendable achievement reflects the responsible fiscal management of the State former Union Finance Minister yardstick,” he said, adding that Tamil Nadu’s debt-to-GSDP ratio has remained stable from 2021–22 through 2025–26.
Chidambaram further noted that fiscal projections indicate a steady reduction in the State’s fiscal deficit, with Tamil Nadu expected to meet the National Institution for Transforming India (NITI Aayog) target of limiting the deficit to three per cent by 2025–26. “This is a commendable achievement and reflects responsible fiscal management,” he said.
While acknowledging that there is always scope for improvement in financial governance, he strongly opposed comparisons between Tamil Naduand Uttar Pradesh, calling them misleading and inappropriate given the differing economic structures, revenue bases and development trajectories of the two states.
Chidambaram’s rejoinder follows sharp reactions from the DMK to Praveen Chakravarthy’s remarks, prompting the senior leader to clarify the party’s position and ease tensions within the INDIA bloc partner.