Tamil Nadu's Subsidy Bill Soars Ahead of Elections, Fiscal Concerns Emerge

• Tamil Nadu's subsidy expenditure is projected to reach nearly Rs 59,526 crore in FY26, the highest in the country.
• Subsidies now account for 13.6 percent of the state's total expenditure, up from 10.5 percent in FY24.
• The Kalaignar Magalir Urimai Thittam (KMUT) income-support scheme's outlay has increased significantly, with potential for further doubling.
• Despite rising welfare spending, Tamil Nadu's fiscal deficit remains broadly contained, slightly above 3 percent of GSDP.
• Concerns arise from the state's elevated debt-to-GSDP ratio (29.2%) and lower-than-average own tax revenue (6.2% of GSDP).