CHENNAI: Finance Minister Thangam Thennarasu on Tuesday presented a Rs 4.67 lakh crore interim budget for poll-bound TN, with a total revenue deficit projection of Rs 48,696.32 crore and total debt burden of Rs 10.62 lakh crore expected by March 31, 2027.
Presenting the interim budget for 2026-27 that saw a maximum of Rs 57,039 crore earmarked for education and Rs 35,773 crore for urban development sectors, and Rs 22,090 crore for the health department, Thennarasu launched a broadside against the BJP-led centre for its “unprecedented fiscal injustice” and attempt to create a “financial crisis in TN”. He also spotlighted the significant progress made across sectors by the DMK government led by Chief Minister M K Stalin amid such political challenges and global headwinds.
While the revenue deficit shot up for the current year by Rs 27,584 crore from Rs 41,635 crore (1.17% of GSDP) as projected in the 2025-26 budget to a revised estimate of Rs 69,219 crore (1.94% of GSDP), the fiscal deficit was revised from the 2025-26 budget estimate of Rs 1,06,963 crore (3% of GSDP) to Rs 1,24,007 (3.48% of GSDP) crore in the revised estimate, an increase of Rs 17,044 crore.
The minister, who allocated a large chunk of his 142-minute speech to recall the achievements of the DMK government over the past five years, however, did not make any new announcements in the interim budget in keeping with the conventions of the House. The new government, which would assume office after the Assembly polls, will present a full budget.
Condemning the centre’s apathetic attitude, the minister said that in a federal system, states have faced unfair treatment in the past, but the present challenges are unprecedented. The union government has denied key infrastructure approvals, withheld funds under centrally-sponsored schemes, reduced tax revenues without consultation, and imposed expenditure conditions, thereby destabilising the state’s finances, he said.
He said the state faced severe fiscal stress due to multiple actions by the union government, including the GST rate rationalisation, which has caused a Rs 9,600 crore shortfall; an unannounced Rs 1,709 crore IGST deduction; and a Rs 1,202 crore cut in the state’s share of central taxes. The Rs 9,500 crore paid by the state towards the union’s share of Chennai Metro Phase-II carried on the state’s debt books also worsened the TN’s fiscal position, the FM said.
Thennarasu also recalled that the 16th Finance Commission report had deeply disappointed TN. Although all states had unanimously sought a higher share in the divisible pool of central taxes, the commission has retained it at 41%, he said.
‘DMK discharging duty of defining people-centric govt’
The state’s strong concerns about the rising levies on cesses and surcharges were also ignored, he said. The FM also recalled Muthamizh Arignar Kalaignar’s words on the budget and said it provided enduring guidance on how a budget should be framed.
“The focus should be on identifying the means to mobilise the necessary financial resources for a well-conceived plan, rather than reducing plan expenditure or slowing the pace of development on the grounds that adequate funds are not presently available. Our budget must serve as an instrument for planned development, without in any way diminishing the momentum of constructive work,” the DMK stalwart had said more than half a century ago.
It is because we have consistently followed this guidance of Muthamizh Arignar Kalaignar, given in the budget speech of 1971-72, that today TN has achieved remarkable growth across various sectors and stands as a leading state in the country. The minister said the DMK government has been discharging a historic duty of guiding the nation in defining the model of a truly people-centric government.
In this connection, he took pride in pointing out that while achieving high economic growth by boosting exports and containing inflation, the DMK government has also launched the final assault on poverty in TN. Even as proactive efforts are undertaken to promote balanced industrial growth across the state, major schemes are being implemented to safeguard workers’ welfare.
Indicating that the state government accorded equal importance to inclusive growth, the minister also said that as the government promoted balanced industrial growth across the state, it also implemented schemes to protect workers’ welfare. “While attracting large-scale foreign investments, we have not neglected growth of micro and small firms.”