A recent remark by a Congress leader regarding Tamil Nadu's debt has sparked a political controversy, creating friction within the DMK-Congress alliance ahead of the 2026 Assembly elections. Praveen Chakravarty, the chairperson of the All India Professionals' Congress, questioned the financial management of the Tamil Nadu government, claiming the state's debt has surpassed that of Uttar Pradesh.

Chakravarty's statement, made on social media platform X, asserted that Tamil Nadu holds the highest outstanding debt among all states. He further elaborated that in 2010, Uttar Pradesh's debt was significantly higher than Tamil Nadu's, but the situation has since reversed. He also pointed out that Tamil Nadu's interest burden is the third highest in India, following Punjab and Haryana, and its debt-to-GDP ratio is considerably higher than pre-COVID levels. According to Anbumani Ramadoss, PMK president, Tamil Nadu's total outstanding debt has risen to ₹9,55,690 crore by the end of 2024-25, exceeding Uttar Pradesh's ₹8.57 lakh crore and Maharashtra's ₹8.12 lakh crore. Chakravarty's criticism came in response to DMK leader Kanimozhi's claims that the DMK government had transformed Tamil Nadu into a developed and progressive state after the AIADMK.

The DMK has reacted sharply to Chakravarty's comments. DMK leaders and supporters have defended the state's borrowing practices. Congress MP Jothimani argued that Tamil Nadu's borrowings have facilitated investments in education, healthcare, infrastructure, and social welfare, leading to the state's prominent position in human development indicators. She also contrasted Tamil Nadu's progress with Uttar Pradesh's struggles in human development.

The BJP has also weighed in on the issue, with former Tamil Nadu BJP president K. Annamalai accusing the DMK of falsehoods and questioning the relationship between the DMK and Congress. Annamalai described Praveen's remarks as “rare public criticism” from an ally within the INDIA bloc.

The controversy has highlighted existing tensions within the DMK-Congress alliance. Chakravarty's meeting with Tamilaga Vettri Kazhagam (TVK) president and film star Vijay, instead of attending a meeting with Chief Minister MK Stalin, had previously fueled speculation about potential shifts in alliances.

It is important to note that high debt levels are not unique to Tamil Nadu. In 2023-24, Uttar Pradesh's debt burden was estimated to reach Rs 7.84 trillion, which was almost 40% higher. Several Indian states have a high debt to GDP ratio. States like Punjab and Himachal Pradesh have debt ratios above 45%. The Reserve Bank of India (RBI) has projected that aggregate state debt will rise to 27% of GSDP by FY27.

The increasing debt of states is a matter of concern, potentially leading to reduced capital expenditure and increased debt distress. However, officials have also argued that increased borrowing can lead to increased spending on key infrastructure like roads, electricity, education and health. Some experts say that States need better planning and should control borrowing.