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Tamil Nadu Finance Minister Thangam Thennarasu on Friday stated that the central transfers from the Union Government in the form of Grants-in-aid and share in central taxes as a proportion of total revenue receipts have reduced significantly.
The Tamil Nadu Minister while presenting the state budget for 2025-26 said that the state's own revenues have been increasing due to the efforts of the state Government. "While the State's Own Revenues have been increasing due to the efforts of the Government, the central transfers from the Union Government in the form of Grants-in-aid and share in central taxes as a proportion of total revenue receipts have reduced significantly," Thennarasu said. He said that withholding of funds under Samagra Shiksha, denial of funds under NDRF for Cyclone Fengal, and a paltry release of Rs 276 crore for two massive disasters in the form of Cyclone Michaung and the unprecedented rainfall in southern districts have all caused severe strain on the State Finances. "In 2024-25, the grants-in-aid are estimated to substantially reduce to Rs.20,538 crore in the Revised Estimates, as compared to the Rs. 23,354 crore projected in the Budget Estimates. Anticipating the release of the entire funds due to the State under Samagra Shiksha in the ensuing year, the Grants-in-aid receivable from the Union Government are estimated at Rs.23,834 crore in Budget Estimates 2025-26," he added. He further said that the share in central taxes has been estimated at Rs.52,491 crore in the Revised Estimates, as compared to Rs.49,755 crore in the Budget Estimates 2024-25. "While there is an increase owing to the higher tax collections by the Union Government, it continues to be far less than what should accrue to the indiscriminate levy of cess and surcharges. The Share in Central Taxes is estimated at Rs.58,022 crore in the Budget Estimates 2025-26 based on the Union Government's budgetary allocation. When seen in comparison to our contribution of 9 per cent to the nation's economy and 6 per cent of the Country's population, the 4 per cent share in central taxes is a gross injustice to the State," he added. "In aggregate, the total amount of funds received from the Union Government as a percentage of the Gross State Domestic Product (GSDP) to the State has seen a constant and precipitous fall in the past few years, reducing from a high of 3.41 per cent of GSDP in 2016-17 to a meager 1.96 per cent in the Revised Estimates 2024-25. In current GSDP terms, the reduction of 1.45 per cent translates to a loss of Rs.45,182 crore to the State, which is almost 44.43 percent of our estimated Fiscal Deficit in Revised Estimates 2024-25," he further said. Thennarasu then said, "This year the Union Government cheated us by not releasing Rs 2,152 crores to the State for not accepting NEP, which encourages a language system. Though the Union Government didn't release the required funds, the State government allocated its own funds for the welfare of government school students, for teachers' salaries, and for other expenses." "Two more bridges in Chennai to reduce the traffic... Near Tambaram, a Plant would be set up to produce electricity from solid waste... Development works worth Rs 2 Crores would be carried out on the banks of rivers," the minister added. (ANI)
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