In his inaugural speech, C Joseph Vijay, the new Chief Minister of Tamil Nadu, accused the previous DMK-led government of leaving the state treasury empty and burdened with a debt of ₹10 lakh crore (approximately $1.2 trillion USD). Former Chief Minister M K Stalin refuted these claims, asserting that the state has financial resources that require effective governance. According to the Reserve Bank of India, Tamil Nadu's outstanding liabilities were ₹9.56 lakh crore at the end of FY25, the highest among Indian states. Despite this, Tamil Nadu has been one of the fastest-growing states in India, with a real growth rate of 10.8% in FY26. The state's debt-to-GSDP ratio stands at 30.6%, indicating a manageable level of debt compared to its economic output. However, nearly 62% of the state's revenue is earmarked for committed expenditures such as salaries and pensions, limiting funds available for development projects. Vijay's electoral promises, including providing free electricity, could further strain the state's fiscal health, which is already under pressure due to an ageing population that will increase future spending on pensions and healthcare.