CHENNAI: The Assembly on Friday re-adopted the Tamil Nadu Fiscal Responsibility (Amendment) Bill, 2024, which had earlier been returned by Governor RN Ravi with certain observations. The bill was moved for reconsideration by Finance Minister Thangam Thennarasu and was later passed unanimously through a voice vote.
Speaker M Appavu informed the House that the governor, in his communication to the speaker, had returned the bill under Article 200 of the Constitution, seeking its reconsideration. The governor had noted that the proposed amendment aimed to defer the achievement of zero revenue deficit and a 3% fiscal deficit to 2026-27 and March 31, 2026, respectively, extending beyond the timeline recommended by the Fifteenth Finance Commission (2021-26).
Ravi also cautioned that extending fiscal targets beyond the finance commission’s award period could weaken fiscal discipline, undermine the credibility of the state’s financial management, and affect creditworthiness.
Responding to the governor’s remarks, Finance Minister Thangam Thennarasu explained Tamil Nadu had been a pioneer in ensuring fiscal accountability, being one of the first states in India to enact its own fiscal responsibility legislation in 2003, a year before the Union government passed a similar law.
The minister pointed out that even when the original Act was framed, fiscal targets extended beyond the term of the government in office at that time. Successive governments, he noted, have modified the goals to align with evolving socio-economic priorities while continuing to uphold the principle of fiscal prudence.
Citing the union government’s own Fiscal Responsibility and Budget Management (FRBM) Act, 2003, which came into force after a change of government in 2004, Thennarasu said fiscal laws must serve the broader objective of stability and accountability rather than political timelines.
Members of DMK, Congress, CPI, CPM, PMK, MDMK, VCK, and TVK supported the motion to re-adopt the bill. However, AIADMK legislators neither supported nor opposed the bill and chose not to participate in the discussion.
After the debate, the House unanimously re-adopted The Tamil Nadu Fiscal Responsibility (Amendment) Bill, 2024 through a voice vote.