PMK publishes the “Shadow Economic Survey” for the second year in a row

Ahead of its shadow budget presentation on Monday, the Pattali Makkal Katchi (PMK) on Sunday presented its ‘Shadow Economic Survey’ for the second consecutive year.

According to the report, only ₹1,92,493.07 crore has been mobilized against the projected State Tax Revenue (SOTR) of ₹2,20,895 crore, a shortfall of 13%. None of the major components of the SOTR, including Goods and Services Tax (GST), stamp duty and registration fees and motor vehicle tax, have met their targets.

Although Tamil Nadu’s economy grew by 10.83% in 2024-25, the report said the higher growth did not translate into higher revenue for the exchequer. The state’s non-tax revenue for 2025-26 was 29.10%, lower than the previous year and 17.31% below the budget estimate, the report said. The state also received a lower-than-expected share of central taxes and grants-in-aid, she said.

Capital expenditure

Capital expenditure did not increase in 2025–26, resulting in limited creation of public infrastructure and productive assets.

At the same time, revenue expenditure rose sharply. The government’s failure to raise revenue and curb spending has significantly widened the revenue shortfall, the report said.

Waiver of ₹6,000 crore in farm loans, increase in free electricity to 200 units and closure of 717 Tasmac branches would further widen the revenue shortfall in 2026-27, the company said.

With the state’s total debt reaching ₹16.70 crore by the end of this year, the government will have to pay ₹80,000 crore as interest on loans in 2026-27. Public sector undertakings (PSUs) would have to pay around ₹48,875 crore as interest on their borrowings, the report said.

To raise revenue, the report proposed measures to increase the SOTR to 7% over the next five years and increase the state’s economic growth to 12% to 13% annually. He also said that the share of Centre’s shared taxes allocated to the states should be increased to 50% and that the cesses and surcharges collected by the Union Government should be merged into a divisible pool of taxes.

Published – 26 Jul 2026 23:21 IST