The political landscape in Tamil Nadu is heating up as the Congress party and the ruling DMK engage in a war of words over the state's financial health, ahead of the 2026 assembly elections. The discord centers on claims made by Congress leaders that Tamil Nadu's debt is spiraling out of control and now exceeds that of Uttar Pradesh, a significantly larger state.
Praveen Chakravarty, a Congress leader and data analyst, ignited the debate by asserting that Tamil Nadu carries the highest outstanding debt among all states. He highlighted that in 2010, Uttar Pradesh's debt was more than double that of Tamil Nadu, but the situation has now reversed. Chakravarty also pointed out that Tamil Nadu's interest burden is the third highest in the country, following Punjab and Haryana, and its debt-to-GDP ratio is substantially higher than pre-COVID levels.
These statements have drawn strong reactions from the DMK, with party leaders disputing the claims and defending the state government's financial management. DMK spokesperson Salem Dharanidharan countered that Tamil Nadu is one of the best-performing states in terms of economic health and that the state's per capita GDP has increased exponentially compared to Uttar Pradesh.
Adding fuel to the fire, the Congress party is also reportedly seeking a greater share of power in the DMK-led alliance, including cabinet berths, for the upcoming elections. This demand has been met with resistance from within the DMK, with sources indicating that the party leadership is firm on maintaining its dominant role in the government.
The DMK and Congress have been allies for several years, and the Congress has generally played a supportive role in the coalition. However, the recent assertions by Congress leaders signal a potential shift in the power dynamics between the two parties. Some political analysts suggest that the Congress is attempting to increase its leverage in the alliance and secure a more prominent position in the state's political landscape. Others believe that the Congress may be exploring alternative alliances, particularly with actor Vijay's Tamilaga Vettri Kazhagam (TVK), although this has been downplayed by state Congress leaders.
The timing of these developments is significant, as Tamil Nadu is gearing up for the 2026 assembly elections. The DMK has been projecting confidence in its ability to retain power, while the Congress is seeking to revitalize its presence in the state. The outcome of the financial debate and the negotiations over power-sharing will likely have a significant impact on the shape of the DMK-Congress alliance and the broader political landscape in Tamil Nadu as the state approaches the elections.
Notably, Tamil Nadu's budget for 2025-26 projects a GSDP of Rs 35,67,818 crore, a 15% increase over the previous year. However, the state's debt is expected to rise to ₹9,29,959.30 crore by March 2026, constituting 26.07% of the GSDP. The government plans to borrow ₹1.62 lakh crore during 2025-26 and repay ₹55,844.53 crore. Uttar Pradesh, on the other hand, presented a budget of Rs 8,08,736 crore for 2025-26, with a focus on infrastructure, education, and agriculture. The state's GSDP for 2025-26 is projected to be Rs 30.8 lakh crore, a 12% increase over the previous year.
