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The Hindu
The Hindu
National
T. Ramakrishnan

Economic growth not affected by public debt in Tamil Nadu during 2005-2023, says a study

Tamil Nadu

Tamil Nadu’s public debt has neither “adversely affected” the growth nor “supported” it, according to a study by two veteran economists.

This finding was with reference to the period from 2005-06 to 2022-23 when the public debt-Gross State Domestic Product (GSDP) ratio had a negative effect on real economic growth, but it was “not significant”.

Economists C. Rangarajan and K.R. Shanmugam of the Madras School of Economics, who carried out the study by covering different facets of the State economy, however, cautioned that in future, a “higher debt ratio may adversely affect growth”. They also observed that “reduction in the debt-GSDP ratio may induce growth”.

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