CHENNAI: With the Union government announcing that the states’ share in the divisible pool of central taxes will remain at 41%, rejecting the long-standing demand to raise it to 50%, Chief Minister and DMK president MK Stalin on Sunday termed the Union Budget for 2026-27 as disapointment as it had completely ignored Tamil Nadu and failed to address the concerns of states.
In a statement, Stalin said that with the Tamil Nadu Assembly election approaching, there was an expectation that the Union BJP government would, at least this year, take note of the State’s rights and demands. “That hope has been belied, and what has been delivered instead is disappointment,” he said.
Referring to the Budget presented in Parliament, he alleged that the interests of Tamil Nadu had been totally sidelined and that there were no significant schemes that would benefit the poor, women, farmers, or marginalised sections.
Stalin said the demand by Tamil Nadu and several other States to increase the States’ share in the total tax revenue from 41% to 50% had once again been ignored, with the announcement that the share would continue at 41%. This, he said, was deeply disappointing.
He further stated that despite the 16th Finance Commission acknowledging the role of States in driving India’s economic growth, Tamil Nadu, which has the country’s second-largest economy and makes a major contribution to national growth, had been allotted a lower share of tax devolution compared with other developed States. The State’s share, he said, was set at only 4.097% for the next five years. Preliminary estimates indicated that this would result in an annual revenue loss of about Rs 5,000 crore compared with comparable States. The long-standing neglect of Tamil Nadu in fiscal devolution, he added, had not been corrected even by the 16th Finance Commission.
Stalin also criticised the reduction in Tamil Nadu’s share of Union taxes by about Rs 1,200 crore this year, particularly at a time when States’ revenues had been adversely affected by changes in the Goods and Services Tax regime.
Flagging sharp cuts in key centrally sponsored schemes.
Stalin said allocations under the Jal Jeevan Mission had dropped from Rs 67,000 crore in the Budget Estimates to just Rs 17,000 crore in the revised estimates, despite Tamil Nadu’s pending claim of Rs 3,112 crore.