Under the new sharing formula, the Union government will bear 60% of the scheme expenditure, while the remaining 40% will have to be contributed by the State government. As part of the revised arrangement, the Centre has allocated Rs 7,585.49 crore for Tamil Nadu.

Officials said Tamil Nadu would be required to contribute Rs 3,034.19 crore during the remaining nine months of the current financial year to implement the programme.

"The State has been a pioneer in implementing rural employment and livelihood schemes over the past two decades. To continue that legacy, the government has decided to implement the scheme from July 1 under the revised pattern. However, the major concern is the State's financial commitment," a senior official said.

According to estimates, Tamil Nadu may have to spend between Rs 4,500 crore and Rs 5,000 crore annually under the revised funding structure. For the current financial year, the State's share is expected to exceed Rs 3,000 crore.

Officials noted that the previous funding mechanism involved a substantially lower burden on State finances. During the previous DMK regime, concerns had been raised with the Union government regarding changes in the funding structure of centrally sponsored rural employment schemes.

Apart from the financial implications, the State has also expressed reservations about certain operational guidelines under the new framework. Officials pointed out that restrictions on undertaking work for up to 60 days in specific districts could affect livelihoods and disrupt employment generation, particularly in regions where agricultural seasons vary.

Despite these concerns, the government has decided to roll out the scheme from July 1 and is making administrative preparations for the same.