Tamil Nadu Budget 2024-25 Analysis
Tamil Nadu Budget 2024-25 Analysis
2024-25
The Finance Minister of Tamil Nadu, Mr. Thangam Thenarasu, presented the Budget for the state for the financial
year 2024-25 on February 19, 2024.
Budget Highlights
▪ The Gross State Domestic Product (GSDP) of Tamil Nadu for 2024-25 (at current prices) is projected to
be Rs 31,55,096 crore, amounting to growth of 16% over 2023-24.
▪ Expenditure (excluding debt repayment) in 2024-25 is estimated to be Rs 4,12,504 crore, an increase of
12% over the revised estimates of 2023-24. In addition, debt of Rs 41,178 crore will be repaid by the state.
▪ Receipts (excluding borrowings) for 2024-25 are estimated to be Rs 3,03,814 crore, an increase of 10% as
compared to the revised estimate of 2023-24.
▪ Revenue deficit in 2024-25 is estimated to be 1.6% of GSDP (Rs 49,279 crore), similar to the revised estimates
for 2023-24 (1.6% of GSDP). However, in absolute terms revenue deficit is estimated to be higher by Rs 4,372
crore in 2024-25 over revised estimate of 2023-24. In 2023-24, revenue deficit at the revised estimates stage is
expected to be 20% higher than the budget estimate.
▪ Fiscal deficit for 2024-25 is targeted at 3.4% of GSDP (Rs 1,08,690 crore). In 2023-24, as per the revised
estimates, fiscal deficit is expected to be 3.5% of GSDP.
Policy Highlights
▪ Education: Under the Tamizh Pudhalvan scheme, boys who have studied in government schools from 6th
to 12th standard will be provided financial assistance of Rs 1,000 per month to help them purchase learning
materials for their higher education. The scheme will cover around three lakh students with a cost of Rs
360 crore in 2024-25. The state government will also ensure that education loans worth Rs 2,500 crore are
disbursed by banks to one lakh college students in 2024-25.
▪ Housing: Eight lakh concrete houses will be constructed in rural areas by 2030. In the first phase, one lakh
new houses will be built in 2024-25 at a unit cost of Rs 3.5 lakh per house. Under Kalaignarin Kanavu
Illam scheme, funds will be provided to selected beneficiaries for constructing houses. It will be
implemented at a cost of Rs 3,500 crore in 2024-25.
▪ Roads: 2,000 km of rural roads will be developed at a cost of Rs 1,000 crore and 4,457 km of urban roads
will be upgraded at a cost of Rs 2,500 crore in 2024-25.
Tamil Nadu’s Economy Figure 1: Growth in GSDP and sectors in Tamil Nadu at
constant prices (2011-12)
▪ GSDP: In 2023-24, Tamil Nadu’s GSDP (at
constant prices) grew at 8.2%, same as in 2022- 20%
23. India’s GDP is also estimated to grow at 8.2% 15%
in 2023-24.
9.4%
9.3%
9.1%
8.2%
8.2%
7.9%
7.8%
7.1%
6.8%
6.4%
10%
▪ Sectors: In 2023-24, the services sector is
4.3%
3.8%
3.4%
Anirudh TR
anirudh@[Link] June 28, 2024
PRS Legislative Research ◼ Institute for Policy Research Studies
3rd Floor, Gandharva Mahavidyalaya ◼ 212, Deen Dayal Upadhyaya Marg ◼ New Delhi – 110002
Tel: (011) 2323 4801, 4343 4035 ◼ [Link]
Tamil Nadu Budget Analysis 2024-25 PRS Legislative Research
Expenditure in 2024-25
▪ Revenue expenditure for 2024-25 is proposed to be Rs Grants to TANGEDCO
3,48,289 crore, an increase of 10% over the revised
Between, 2019-20 and 2024-25 the state government is
estimate of 2023-24. This includes the expenditure on estimated to provide Rs 73,821 crore as grants to Tamil
salaries, pensions, interest, grants, and subsidies. Nadu Electricity Generation and Distribution Company
▪ Capital outlay for 2024-25 is proposed to be Rs 47,681 (TANGEDCO). This includes UDAY grants and grants
for funding its losses. However, TANGEDCO has
crore, an increase of 12% over the revised estimate of
continued to incur substantial losses due to a gap
2023-24. Capital outlay indicates the expenditure between its per unit cost of supply of electricity and per
towards creation of assets. unit revenue realised. In 2022-23, this gap was Rs 1.05
▪ In 2024-252023-24, loans and advances by the state are per kWh as compared to the national average of Rs
0.74 per kWh for state-owned discoms. The White
expected to be Rs 16,534 crore, higher than the revised
Paper released by the state government had noted that
estimates by 79%.* TANGEDCO’s losses are caused by both high costs and
low recoveries. It called for a complete restructuring of
TANGEDCO.
Sector-wise expenditure: The sectors listed below account for 55% of the total expenditure on sectors by the
state in 2024-25. A comparison of Tamil Nadu’s expenditure on key sectors with that by other states is shown
in Annexure 1.
Table 4: Sector-wise expenditure under Tamil Nadu’s Budget 2024-25 (in Rs crore)
% change
2022-23 2023-24 2023-24 2024-25 from RE Budget Provisions
Sectors
Actuals BE RE BE 23-24 to 2024-25
BE 24-25
▪ Rs 14,795 crore has been allocated for
Education, Sports, government secondary schools.
45,147 49,700 48,596 54,327 12%
Arts, and Culture ▪ Rs 13,026 crore has been allocated for
government primary schools.
▪ Rs 13,720 crore has been allocated
Social Welfare and towards Magalir Urimai Thogai scheme.
18,219 26,614 30,233 34,548 14%
Nutrition ▪ Rs 3,851 crore has been allocated for
pension under social security schemes.
▪ Rs 7,216 crore has been allocated for
payment to Tamil Nadu electricity board for
Agriculture and
23,648 22,971 21,108 24,232 15% usage of farm pump sets.
Allied Activities
▪ Rs 1,338 crore has been allocated for crop
insurance.
▪ Rs 17,889 crore has been allocated for
Transport 19,807 22,306 21,250 23,828 12%
capital outlay on roads and bridges.
▪ Rs 14,442 crore has been allocated for
funding losses of TANGEDCO.
Energy 17,642 8,426 24,176 21,606 -11% ▪ Rs 6,743 crore has been allocated for
power tariff subsidy for domestic
consumers.
▪ Rs 5,116 crore has been allocated for
Health and Family urban health services – allopathy.
17,621 18,545 18,796 19,730 5%
Welfare ▪ Rs 1,827 crore has been allocated for rural
health service – allopathy.
▪ Rs 3,875 crore has been allocated for rural
Rural Development 10,527 9,413 9,614 12,043 25%
employment guarantee scheme.
▪ Rs 7,119 crore has been allocated towards
Police 9,683 10,368 10,731 11,965 11%
district police.
▪ Rs 2,557 crore has been allocated for
Irrigation and Flood capital outlay on major irrigation.
6,297 7,755 7,146 7,763 9%
Control ▪ Rs 546 crore has been allocated towards
capital outlay on medium irrigation.
Water Supply and ▪ Rs 3,843 crore has been allocated for
2,951 6,418 4,432 6,993 58%
Sanitation capital outlay on rural water supply.
% of total
expenditure on all 54% 52% 54% 55%
sectors
Sources: Annual Financial Statement, Tamil Nadu Budget 2024-25; PRS.
Receipts in 2024-25
▪ Total revenue receipts for 2024-25 are estimated to be Rs 2,99,010 crore, an increase of 10% over the
revised estimate of 2023-24. Of this, Rs 2,25,901 crore (76%) will be raised by the state through its own
resources, and Rs 73,109 crore (24%) will come from the centre. Resources from the centre will be in the
form of state’s share in central taxes (17% of revenue receipts) and grants (8% of revenue receipts).
▪ Devolution: In 2024-25, state’s share in central taxes is estimated at Rs 49,755 crore, an increase of 10%
over the revised estimate of 2023-24.
▪ Grants from the centre in 2024-25 are estimated at Rs 23,354 crore, a decrease of 13% from the revised
estimates for 2023-24.
▪ State’s own tax revenue: Tamil Nadu’s total own tax revenue is estimated to be Rs 1,95,173 crore in
2024-25, an increase of 15% over the revised estimate of 2023-24. Own tax revenue as a percentage of
GSDP is estimated at 6.2% in 2024-25, same as the revised estimates for 2023-24. As per the actual figures
for 2022-23, own tax revenue as a percentage of GSDP was 6.4%.
Table 5: Break-up of the state government’s receipts (in Rs crore)
% change from % change from
2022-23 2023-24 2023-24 2024-25
Items BE 2023-24 to RE 2023-24 to
Actuals Budgeted Revised Budgeted
RE 2023-24 BE 2024-25
State's Own Tax 1,50,223 1,81,182 1,70,147 -6% 1,95,173 15%
State's Own Non-Tax 17,061 20,224 30,381 50% 30,728 1%
Share in Central Taxes 38,731 41,665 45,053 8% 49,755 10%
Grants-in-aid from Centre 37,734 27,445 26,996 -2% 23,354 -13%
Revenue Receipts 2,43,749 2,70,515 2,72,577 1% 2,99,010 10%
Non-debt Capital Receipts 1,120 2,731 2,615 -4% 4,804 84%
Net Receipts 2,44,869 2,73,246 2,75,192 0.7% 3,03,814 10%
BE is Budget Estimates; RE is Revised Estimates.
Sources: Annual Financial Statement, Tamil Nadu Budget 2024-25; PRS.
▪ In 2024-25, State GST is estimated to be the largest source of own tax revenue (38% share). State GST
revenue is estimated to increase by 17% over the revised estimates of 2023-24.
▪ Revenue from sales tax/ VAT in 2024-25 is expected to be Rs 69,588 crore, an increase of 12% as compared
to the revised estimates for 2023-24.
-5% -4.6%
0%
2025-26*
2026-27*
2019-20
2020-21
2022-23
2024-25 BE
2023-24 RE
2021-22
2025-26*
2026-27*
2019-20
2020-21
2022-23
2023-24 RE
2024-25 BE
2021-22
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5% 2% 2%
0% 0% 0%
2022-23
2023-24 (RE)
2023-24 (BE)
2024-25 (BE)
2022-23
2023-24 (RE)
2023-24 (BE)
2024-25 (BE)
2023-24 (RE)
2024-25 (BE)
2023-24 (BE)
(2023-24 BE)
Average of all
(2023-24 BE)
2023-24 (RE)
2023-24 (BE)
2024-25 (BE)
Average of all states
2022-23
2023-24 (RE)
2023-24 (BE)
2024-25 (BE)
2022-23
2023-24 (RE)
2023-24 (BE)
2024-25 (BE)
(2023-24 BE)
Average of all
(2023-24 BE)
Note: 2022-23, 2023-24 (BE), 2023-24 (RE), and 2024-25 (BE) figures are for Tamil Nadu.
Sources: Annual Financial Statement, Tamil Nadu Budget 2024-25; various state budgets; PRS.
1
The 31 states include the Union Territories of Delhi, Jammu and Kashmir, and Puducherry.