Centre cut funds worth Rs 2.63 lakh crore, equal to 32% of Tamil Nadu's debt, minister Thennarasu tells Assembly
TN received Rs 2.63 L-cr less than rightful share from Centre
Thangam Thennarasu
CHENNAI: Finance Minister Thangam Thennarasu on Tuesday informed the State Assembly that the Union government has reduced the devolution of funds to Tamil Nadu by nearly 19 per cent – amounting to Rs 2.63 lakh crore, which accounts for 32% of the state's debt – since the 14th Finance Commission.
"Injustice has been meted out to Tamil Nadu since the 9th Finance Commission, and it has continued since then. Since the 14th Finance Commission, the State has been receiving a 19 per cent reduction from its rightful share of the devolution pool. This cut amounts to Rs 2.63 lakh crore, which accounts for 32 per cent of the State's debt. This has caused distress to the State's finances, leading to the current situation," said the minister, delivering the acceptance speech for the supplementary expenditure of Rs 3,531 crore for 2024-2025.
Also Read: Centre releases Rs 1.78 lakh crore tax funds; Tamil Nadu gets Rs 7,268 crore
The minister, however, sounded optimistic by stating that the State's revenue generation is on the rise. "In the coming years, the State's financial management will be more effective," he said, adding the government is also making efforts to reduce the State's debt through effective financial management.
In response to queries regarding the GST taxation pattern raised by the Opposition benches, the minister stated that the Union government should transfer 41 per cent of divisible tax pools to the states, as per the 15th Finance Commission. However, it has transferred only 33 per cent. Of that, TN received just 4.07 per cent, while Uttar Pradesh and Bihar received 17.9 per cent and 10 per cent, respectively.
Also Read: TN BJP chief Annamalai lauds PM Modi for 42% devolution to states
To address this disparity, Chief Minister MK Stalin insisted that the share of states in the divisible pool of taxes be increased to 50 per cent in the 16th Finance Commission recommendations. He also emphasised the need to set a 10 per cent ceiling for cess and additional taxes. If the taxes exceed 10 per cent, the excess should be redirected to the devolution share.