by r srinivasan s raja sethu duraievery new government is always in a haste to implement the election promises without taking stock of the financial situation of the state the government that takes charge in tamil nadu from may 2021 should line up the resources to tackle the second and bigger covid19 wave along with massive vaccination spreading the scarce resources over all programmes is a necessity instead of making election promises a prioritya glance at the revenue receipts of tamil nadu see graphic indicates the states own tax revenue has registered a growth of 105 per year between 201112 and 201718 while the share of central taxes grew by 148 per year in the same period subsequently there is a sharp fall in the states own tax revenue growth at 45 per year and negative growth in the share of central taxes in recent times as per the revised estimates of 202021the general decline in economic growth began around 2014 and adding to that was demonetisation and gst disrupted states own tax collections since 2017 tamil nadu in every budget showed that the inter se share of tamil nadu in central taxes has been reduced by successive finance commissions when the 14th finance commission increased the states share in central taxes to 42 the union government responded with more cess and surcharges that need not be shared with states neither the states own tax revenues nor the central transfers have been buoyant in recent times for reasons mostly beyond the control of the state government there is still scope for better tax collection with tight administration consequently borrowing is the only option but it is not without limitsoutstanding liabilitiesthe tamil nadu state governments outstanding liability see graphic has increased roughly from 131 lakh crore in 201112 to 486 lakh crore in 202021 this is approximately 30 growth per year the tamil nadu state public sector undertakings psus outstanding liabilities increased from 48000 crore in 201112 to 168 lakh crore in 201718 which is 42 growth per year it is an open secret that both the state ad union governments indulge in extrabudgetary borrowings through psus in addition to their own borrowing in the budget the psus borrowing was 37 of government debt in 201112 and it increased to 51 in 201718 what is worrying here is that the extrabudgetary borrowings are growing faster than the state governments own borrowing in the public accountanother disturbing factor is the interest rate at which these borrowings are being made the interest payment as a proportion to the outstanding liabilities is a crude indicator of the interest rate it was 68 for state government and 9 for state psus in 201112 and the corresponding rates were 8 and 96 in 201718 the interest rates on both government and its psu borrowings increase at a higher rate with the interest rate for psu has always been higher than that of the governmentinterest rate is the summary indicator of the borrowers credibility perceived by