Politics · India Bureau
Tamil Nadu can sustain 23% debt-to-GSDP ratio, says economic adviser
A senior economic consultant to the Tamil Nadu government has outlined that a debt-to-GSDP ratio of 23% represents a sustainable threshold for the state. The economist stressed that strategic borrowing remains a critical financing mechanism for development initiatives.
LSN India ·
An economic adviser to the Tamil Nadu government has indicated that the state can sustainably maintain a debt-to-gross state domestic product (GSDP) ratio of 23%, providing a benchmark for fiscal management in the southern state.
In remarks addressing concerns over public debt levels, the consultant underscored that borrowing itself should not be viewed as inherently problematic. Rather, the economist emphasized that debt serves as a vital funding source for infrastructure and development projects that drive economic growth.
The 23% threshold provides policymakers with a quantifiable target for managing the state's finances while maintaining fiscal stability. This guidance comes as Tamil Nadu, like many Indian states, seeks to balance development spending with fiscal sustainability amid evolving economic conditions.
The comments reflect broader economic thinking that distinguishes between productive borrowing for capital projects and unsustainable debt accumulation. Strategic deployment of debt for development remains a widely accepted practice among economists and development institutions globally.