Tamil Nadu FM Thangam Thennarasu Slams Centre Over Declining Funds in 2025-26 Budget

Tamil Nadu Finance Minister Thangam Thennarasu, while presenting the 2025-26 state budget, expressed concern over the significant decline in central transfers from the Union Government. He noted that although Tamil Nadu's own revenue has increased due to state efforts, the share of Grants-in-aid and central taxes in total revenue receipts has sharply declined.
Thennarasu highlighted financial strain caused by withheld or insufficient central funds, citing examples such as the non-release of funds under Samagra Shiksha, denial of NDRF aid for Cyclone Fengal, and a meagre allocation of Rs 276 crore for Cyclone Michaung and southern district floods. Grants-in-aid for 2024-25 have been revised down to Rs 20,538 crore from the budgeted Rs 23,354 crore, but are estimated at Rs 23,834 crore for 2025-26.
He stated that while Tamil Nadu’s share in central taxes for 2024-25 was revised up to Rs 52,491 crore, and projected at Rs 58,022 crore for 2025-26, it remains unfairly low given the state's 9% contribution to the national economy. The share has fallen to just 4%.
Overall, central funds as a percentage of GSDP dropped from 3.41% in 2016-17 to 1.96% in 2024-25 RE, implying a Rs 45,182 crore loss—nearly 44% of the state's fiscal deficit. He also criticized the Centre for withholding Rs 2,152 crore over Tamil Nadu's rejection of the NEP.