CHENNAI: Describing the Union Budget for 2026-27 as a big disappointment as far as Tamil Nadu is concerned, Chief Minister MK Stalin on Sunday said the meagre 4.097% tax devolution to the state for the next five years will result in an annual revenue loss of approximately Rs 5,000 crore compared to other states.
In a detailed statement, the CM said the interests of TN have been completely ignored in the budget. The continued neglect of TN in financial devolution over the past several years has not been corrected even by the 16th Finance Commission, which is a matter of grave concern, he said.
Stalin also condemned the reduction in TN’s share of union taxes to around Rs 1,200 crore this year (in the Revised Estimates of 2025-26 compared to the Budget Estimates of 2025-26 presented last year) at a time when states’ revenues have already been adversely affected by changes in the GST regime.
Not a single scheme for TN in Budget: CM
“The long-standing demand of Tamil Nadu and several other states to increase the states’ share in total tax revenue from 41% to 50% has once again been ignored. The announcement that the states’ share will continue to remain at 41% is deeply disappointing,” he said.
Despite repeated representations, Stalin said, the union government has not released the Rs 3,112 crore pending under the Jal Jeevan Mission, even though Tamil Nadu is a top-performing state, while the scheme’s allocation has been drastically cut from Rs 67,000 crore in the 2025-26 Budget Estimates to just Rs 17,000 crore in the Revised Estimates, virtually crippling it. Similarly, the Pradhan Mantri Gram Sadak Yojana allocation has been reduced from Rs 19,000 crore to Rs 11,000 crore, and the Pradhan Mantri Awas Yojana (Rural) from Rs 35,832 crore to Rs 32,500 crore.
Most disappointing is the PM Internship Scheme, whose allocation has been slashed from Rs 10,831 crore to a mere `526 crore, suggesting a complete failure of the scheme, he added.
The CM further said that despite expectations of measures for Tamil Nadu, the budget announced no new schemes for the state.
Also, it made no mention of the Rs 3,548 crore due under Samagra Shiksha, which was withheld citing the three-language policy. The absence of any Tamil Nadu-specific initiatives once again reflects the union government’s step-motherly approach towards the state.
The Union Budget was eagerly awaited, but it turned out to be even more disappointing than usual. Even the customary quotation from the Thirukkural, which usually features in the budget speech, was missing this time, he said, adding that not a single major scheme for the state found a place in the budget.
Meanwhile, state Finance Minister Thangam Thennarasu, in an X post, echoed similar views.
Stating that no clear announcements were made on key sectors such as the requirements for the state’s fundamental development, employment generation, education, healthcare and industrial investment, Thennarasu said the legitimate demands consistently raised by the people of Tamil Nadu over the years have once again been ignored.