Daijiworld Media Network - Chennai
Chennai, Jan 2: The Bharatiya Janata Party on Friday mounted 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, terming 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 might appear correct at first glance, they deliberately ignored key 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 debts of all states, and that comparing Tamil Nadu’s economy with Uttar Pradesh’s economy is wrong. While what he said may seem correct at first glance, this is nothing but a political statement that hides the truth,” Narayanan said.
He asserted that borrowing by states was not inherently problematic, but stressed that the real issue lay in how the borrowed funds were utilised. “The fundamental principle of economics is that borrowing for capital expenditure, expanding infrastructure and increasing assets leads to industrial growth, employment generation, higher revenues and overall economic improvement,” he said.
Contrasting capital investment with what he described as populist schemes, Narayanan argued that long-term growth depended on sustained infrastructure spending. “Spending on populist schemes to win elections and repeatedly return to power will only lead to setbacks,” he added.
Citing comparative data, the BJP spokesperson said Uttar Pradesh, with a population nearly three times that of Tamil Nadu, had significantly increased capital expenditure in recent years. He claimed that over the past five years, Uttar Pradesh had raised capital spending in sectors such as transport, energy and urban development by an average of 30 per cent annually, while Tamil Nadu’s increase ranged between 10 and 15 per cent.
According to him, Uttar Pradesh’s capital expenditure between 2020-21 and 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 pointed to longer-term trends, stating that from 2000 to 2015, Uttar Pradesh’s capital expenditure was around Rs 7 lakh crore, while Tamil Nadu’s was about Rs 5 lakh crore.
“No one can deny that Tamil Nadu is a more advanced and economically strong state. However, states that were once behind Tamil Nadu are now rapidly closing the gap due to higher infrastructure spending,” Narayanan said, adding that the focus should be on future growth rather than past achievements.
Earlier, Chidambaram had strongly defended Tamil Nadu’s fiscal position and rejected comparisons with Uttar Pradesh, calling them misleading and analytically flawed. In his post on X, he said assessing a state’s financial health solely on the basis of total debt ignored broader economic realities.
He noted that developed economies such as the United States, the United Kingdom, Japan, France and Canada continued to see annual increases in public debt, and said the same trend was visible in India. “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 measure of fiscal health, arguing that the accepted yardstick was the debt-to-GDP or debt-to-GSDP ratio. He pointed out that Tamil Nadu’s debt-to-GSDP ratio had remained stable from 2021-22 to 2025-26 and that fiscal projections showed a steady reduction in the fiscal deficit, with the state expected to meet the NITI Aayog target of limiting it to three per cent by 2025-26.
“This is a commendable achievement and reflects responsible fiscal management,” he said.
The exchange followed a 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 stand and reaffirm confidence in Tamil Nadu’s fiscal management.