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The Bharatiya Janata Party on Friday launched a sharp counterattack against senior Congress leader and former Union Finance Minister P Chidambaram over his criticism of comparisons between Tamil Nadu and Uttar Pradesh based on total debt figures, calling his remarks a “political statement that hides the truth."
Responding to Chidambaram’s post on X, Tamil Nadu BJP chief spokesperson Narayanan Thirupathy said that while the former Finance Minister’s arguments appeared correct at first glance, they deliberately overlooked crucial aspects of economic governance and capital expenditure.
“Former Finance Minister P. Chidambaram has stated that evaluating a state’s economy based on its total debt is incorrect, that India’s total debt is increasing annually when combined with the total debts of all states, and that comparing Tamil Nadu’s economy with Uttar Pradesh’s economy is wrong."
“While what he said in detail may seem correct at first glance, this is nothing but a political statement that hides the truth," Narayanan mentioned.
He asserted that there was nothing inherently wrong with states taking on debt, arguing that the real issue was how borrowed funds were being utilised.
“The fundamental principle of economics is that by borrowing for capital expenditures, increasing infrastructure, and thereby enhancing assets, industrial growth will rise, employment opportunities will expand, revenue will increase, and the economy will improve," he added.
Narayanan contrasted capital expenditure with what he described as “populist schemes," claiming that infrastructure investment was essential for long-term growth.
“Spending on populist schemes to make the people ‘succeed’—that is, to win elections and gain power—by making promises and then repeatedly returning to power will only lead to setbacks," he mentioned.
Citing comparative figures, the BJP spokesperson said Uttar Pradesh, which he noted has a population about three times that of Tamil Nadu, had significantly ramped up capital expenditure in recent years.
“Over the past five years, the Uttar Pradesh government has been increasing capital expenditures in sectors like transportation, energy, and urban development by an average of 30% annually, while Tamil Nadu has increased its capital expenditures by only 10–15%," he said.
According to Narayanan, Uttar Pradesh’s capital expenditure from 2020–21 to 2024–25 stood at Rs 4,74,982 crore, compared to Tamil Nadu’s Rs 1,95,003 crore during the same period. He also referred to longer-term trends, stating that from 2000 to 2015, Uttar Pradesh’s capital expenditure was about Rs 7 lakh crore, while Tamil Nadu’s was around Rs 5 lakh crore.
“No one can deny or conceal that Tamil Nadu is a more advanced state than Uttar Pradesh and a state with economic strength," he said, adding that states which were previously behind Tamil Nadu were now “closing in rapidly" due to higher infrastructure spending.
“There is no use in dwelling on past glories. The current need is for our state to excel and improve, achieving economic growth with proper planning," Narayanan said.
Chidambaram had earlier strongly defended Tamil Nadu’s fiscal position and rejected the comparison with Uttar Pradesh, calling it misleading and analytically flawed.
In a post on X, the former Union Finance Minister said assessing a state’s financial health solely on the basis of its total debt ignored broader economic realities.
“Developed economies such as the United States, the United Kingdom, Japan, France, and Canada continue to witness an annual increase in their overall public debt," he said, adding that the same trend was visible in India as well.
“Both the country’s total debt and the combined debt of all states rise every year. This, by itself, is not abnormal," he said.
Chidambaram stressed that absolute debt figures were not the correct indicator of fiscal health.
“The correct indicator for assessing financial health is not the absolute quantum of debt, but the ratio of debt to Gross Domestic Product," he said, calling it “the accepted and meaningful yardstick."
He noted that Tamil Nadu’s debt-to-GSDP ratio had remained stable from 2021–22 through 2025–26, and further pointed out that fiscal projections showed a steady reduction in the state’s fiscal deficit, with Tamil Nadu expected to meet the NITI Aayog target of limiting the deficit to three per cent by 2025–26.
“This is a commendable achievement and reflects responsible fiscal management," Chidambaram said.
The exchange followed controversy triggered by earlier remarks from Congress leader Praveen Chakravarty comparing Tamil Nadu’s total debt with Uttar Pradesh’s, which drew strong reactions from the DMK and prompted Chidambaram’s intervention to clarify the Congress position and reaffirm confidence in Tamil Nadu’s fiscal management.
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