Biogeochemical and ecological responses to limited external nutrient loading are poorly understood in tropical semi-enclosed coastal lagoons which are highly influenced by hydrological and salinity regimes. With objectives towards ecosystem sustainability via better management of the nutrient inputs, investigations were carried out to estimate the water, salt, and nutrient budget of "Pulicat" hypersaline coastal lagoon for the year 2018-2019. The budget revealed that the annual rate of precipitation and evaporation are the major driving factors regulating the annual residual flow in the lagoon. Limited exchange of water and material had resulted in a hypersaline condition with high spatial and temporal variation in salinity ranging from 20 to 103. In the absence of external loading, nutrient enrichment by internal compensation had resulted in DIN enrichment. DIN constituents are mainly contributed by ammonia, indicative of remineralisation through benthic regeneration. The extended water residence time and enhanced primary production has converted the inner lagoon into a limited phosphate system. The TRIX index also indicates a decline in the trophic status transforming the lagoon from a mesotrophic to a eutrophic system.