“The Tamil Nadu government must immediately address the long-pending demands of the industrial sector, which plays a crucial role in the state’s economic growth,” said Jayapal, President of the Recycled Textile Federation and State General Secretary of the Tamil Nadu All Entrepreneur Federation, in a statement.

Tamil Nadu is home to around 4.5 million Micro, Small and Medium Enterprises (MSMEs), employing over 20 million workers. Recognising the sector’s significant contribution, the federation has urged the government to take swift action to support its sustainability and growth.

Over the past two decades, the state’s debt has increased substantially. It rose from ₹0.55 lakh crore during 2006–2011 to ₹1.0 lakh crore in 2011–2016, further increasing to ₹2.45 lakh crore in 2016–2021, and reaching ₹5.65 lakh crore in 2021–2026.

Based on current trends, the total debt is projected to exceed ₹11 lakh crore in the financial year 2026–27. The state is currently paying approximately ₹200 crore per day as interest.

In view of the upcoming 2026 Assembly elections, it is estimated that fulfilling new welfare scheme announcements may require additional borrowings of over ₹1.40 lakh crore annually. This would be in addition to existing commitments such as subsidies, welfare schemes, and interest payments on previous loans.

The state budget has consistently reported a fiscal deficit over the past 12 years. The deficit figures (in ₹ crore) are as follows:

2021–22: ₹46,538.03 crore
2022–23: ₹36,215.15 crore
2023–24: ₹45,121.12 crore
2024–25: ₹49,278.73 crore

Meanwhile, revenue from TASMAC has shown a steady increase:

2021–22: ₹36,050 crore
2022–23: ₹44,121 crore
2023–24: ₹45,856 crore
2024–25: ₹48,344 crore
2025–26 (expected): ₹50,000 crore

This totals ₹2,12,326 crore in revenue.

The federation also pointed out that even Gujarat, a state with prohibition, reportedly generates over ₹30,000 crore in revenue after expenses.

Typically, states borrow to invest in future growth. However, in Tamil Nadu, borrowings are increasingly being used to manage current expenditure, the statement noted.

MSMEs contribute significantly to government revenues, providing approximately ₹74,000 crore through state taxes and ₹22,000 crore through direct taxes annually. Given this contribution, the federation has urged the incoming government in 2026 to fulfil the long-standing demands of entrepreneurs.

Key demands:
a) Reduction of fixed charges (₹165) by 50% for Low Tension (LT) electricity consumers.
b) Reduction of demand charges (₹608) by 50% for High Tension (HT) electricity consumers.
c) Waiver of network charges for electricity generated through rooftop solar installations in factories.
d) Waiver of wheeling charges for power generated through wind and solar parks for captive consumption.

The federation stated that implementing these measures would create a competitive power tariff structure, enabling industries in Tamil Nadu to compete effectively with other states. This would lead to increased industrial production, job creation, and higher tax revenues, while also improving liquidity in the state economy.

To support these measures, the state government has been urged to allocate an additional ₹3,800 to ₹4,100 crore annually to the Electricity Board.

At a time when the government allocates over ₹1 lakh crore annually towards subsidies and welfare schemes, the federation stressed that electricity tariffs, professional tax, and waste management taxes imposed on industries must be reduced.

Further, considering both labour welfare and public interest, the federation has requested the government to restrict TASMAC shop operating hours from 6:00 PM to 10:00 PM (only four hours per day).