Chennai, Feb 17 (PTI) Tamil Nadu Finance Minister Thangam Thenarasu on Tuesday presented a Rs 2.55 lakh crore interim budget (2026-27) for the poll-bound state that saw Rs 4,000 crore allocation for the DMK’s flagship scheme of free bus travel for women.
Out of the Rs 2,55,391 crore of sectoral allocations, a maximum of Rs 57,039 crore was earmarked for education and Rs 35,773 crore for urban development and Rs 22,090 crore for the health department.
In the Interim Budget 2026-27, the government has projected its revenue receipts at Rs 3,44,575 crore. The state’s own revenues constitute 74.67 per cent of the total revenue receipts. The balance 25.33 per cent comes from the share in Central taxes and grants-in-aid from the Union government.
In Interim Budget Estimates 2026-27, the Total Revenue Expenditure has been estimated at Rs 3,93,272 crore, showcasing a growth of 3.79 per cent over Revised Estimates 2025-26.
In the ensuing year, the Fiscal Deficit as a percentage of GSDP is estimated to be 3.00 per cent in the Interim Budget Estimates 2026-27, the Minister said adding the overall outstanding debt of the state is estimated to be Rs 9,52,374 crore in the Revised Estimates 2025-26 as against Rs 9,29,959 crore in the Budget Estimates 2025-26.
It showcased the government’s commitment to the path of fiscal consolidation despite several challenges faced on the economy and fiscal fronts, he added.
In his address, the minister also alleged that the union government appeared to leave no stone unturned to artificially precipitate a fiscal crisis in Tamil Nadu.
The Minister said in a federal polity, there were several instances in the past where states had been unfairly treated by the union government.
He further said, “However, I firmly believe that the extent of challenges faced by this government is unprecedented. ” In every field, be it denial of sanction for major infrastructure projects for Tamil Nadu, withholding of release of funds for centrally sponsored schemes, curtailment of tax revenues, or unfair imposition of conditions, the union government appears to leave no stone unturned to artificially precipitate a fiscal crisis in Tamil Nadu, he alleged. He listed the challenges being faced by the government in the current financial year.
For social security schemes, he made a total allocation of Rs 5,463 crore.
He said in order to enhance the operational efficiency, service delivery, and financial position of the transport corporations, a Viability Gap Fund has been created with a corpus of Rs 2,000 crore to provide performance-based incentives.
“In this Interim Budget Estimates, an allocation of Rs 4,000 crore has been made for the Vidiyal Payanam scheme (free bus travel scheme for women beneficiaries), Rs 1,782 crore towards the student bus fare scheme, and Rs 1,857 crore for diesel subsidy.” Overall, Rs 13,062 crore has been allocated to the Transport Department in the Interim Budget Estimates.
The Revenue Deficit in the Interim Budget Estimates for 2026-27 is estimated at Rs 48,696.32 crore.
The government plans to borrow a total amount of Rs 1,79,809.65 crore during 2026-27 and make repayment of Rs 60,413.42 crore. As a result, the outstanding borrowing as on 31st March 2027 will be Rs 10,71,770.34 crore.
On the 16th Finance Commission’s report, the minister said it has been a great disappointment to Tamil Nadu. “Even when all States had unequivocally sought a higher share in the divisible pool of central taxes, the 16th FC has recommended retaining the share at 41 per cent. It is disappointing to see that our serious concern towards the increasing levy of cesses and surcharges has not found place in the Commission’s recommendations.” The construction works for the second phase of the Chennai Metro Rail project, covering a distance of 118.9 km across three corridors at an estimated cost of Rs 63,246 crore, is progressing rapidly.
The regulatory clearances from the Railway Board for commissioning the first stage of phase-II metro project and metro rail corridor from Poonamallee bypass to Porur, which will be integrated with the existing metro line at Vadapalani, are expected soon. This 14.6 km stretch, comprising 11 metro stations, is expected to be opened for public use shortly.
“The government of Tamil Nadu is continuously urging the Union government to reconsider this decision and to accord approval for the Metro Rail projects in Coimbatore and Madurai Metro, as has been done for other similarly placed cities in the country,” he said.
Despite numerous obstacles caused by the step-motherly treatment of the Union Government, including denial of funds and withholding of welfare schemes, the state continued to achieve remarkable milestones, he claimed.
“In the present economic context, Tamil Nadu’s growth rate exceeds that of the national GDP, which is an encouraging development. This relative advantage is anticipated to persist in the forthcoming year,” the minister added.
The Interim Budget speech of the minister was nearly 2.30 hour-long and it is considered as among the lengthiest addresses.
The assembly election is due in April 2026 in Tamil Nadu, and it is expected that the polls will be held that month. PTI JSP VIJ VGN ROH
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