TAPS will strain exchequer; fiscal prudence key, says P Chidambaram

CHENNAI: Senior Congress leader and former Union Finance Minister P Chidambaram has said that the Tamil Nadu Assured Pension Scheme (TAPS) will substantially increase the State’s financial strain, but asserted that it can be implemented successfully if the government adheres to strict fiscal discipline and strengthens its revenue base.

In a post on X, Chidambaram said the full contours of the assured pension scheme had now become clear, revealing that pension liabilities would have a significant impact on the State’s finances. Citing estimates, he noted that nearly 21 to 22 per cent of the State's own tax revenue could be spent on pensions under TAPS.

He stressed that the scheme's long-term sustainability would largely depend on the government’s ability to increase its tax revenue. Alongside revenue augmentation, he called for tight control over expenditure, urging the government to ensure that development projects are completed within approved cost estimates and without cost overruns.

Fiscal prudence, he said, must become a core principle of governance. Chidambaram also emphasised that sound financial management should be the guiding mantra for all government departments.

Only through careful planning, efficient spending, and sustained revenue growth, he added, can the State implement welfare measures such as the assured pension scheme without destabilising public finances.