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The Union Budget for 2025-26 to be presented by Finance Minister Nirmala Sitharaman on Saturday (February 1, 2025), would be keenly watched for any Tamil Nadu related announcements, with the DMK government making a slew of requests including release of funds towards disaster relief.
In a pre-Budget meeting in December, Tamil Nadu Finance Minister Thangam Thennarasu pointed out that funds under the State Disaster Response Fund (SDRF) have proven inadequate to meet the immediate relief and long-term restoration needs and urged the Union government to release a sum of ₹6,675 crore under National Disaster Relief Fund (NDRF) to meet the temporary and permanent relief and restoration requirements in the aftermath of Cyclone Fengal.
Tamil Nadu’s expectations from Union Budget 2025
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S. Shiva Raj
In an interview with The Hindu last month, Mr. Thennarasu said non-release of funds has been a major issue for the State and pointed out that even for Cyclone Michaung (2023) and the unprecedented rainfall in southern districts, the Union Government had released a meagre sum of ₹276 crore, against an amount of ₹37,907 crore sought by the State.
For Samagra Shiksha Scheme, disbursal of ₹2,152 crore is pending. These funds are meant for salary of teachers, maintenance of schools and RTE Act reimbursement. As a result of non-receipt of funds, the State is having to bear these expenditures from their own budgetary resources, causing a severe strain on the finances, he noted.
The funds have been pending as the state government has refused to implement new National Education Policy and the State government has urged the Centre not to impose restrictive or extraneous conditions in the release of funds for various schemes.
The State has also sought the Union Government to allocate ₹10,000 crore in the current year and ₹16,000 crore in the ensuing year for the Chennai Metro Rail Project, besides seeking approval to the metro rail projects for Madurai and Coimbatore. Tamil Nadu has also sought railway projects and highway road projects.
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Chief Minister M.K. Stalin recently said the State is being ignored in the Union Budgets presented by the BJP government and at the party’s meeting of MPs last month, a resolution was passed demanding allocation for Tamil Nadu in the Budget.
As per the Tamil Nadu Budget for 2024-25, the State is estimated to receive ₹49,754.95 crore as its share in Central Taxes. So far in 2024-25 (till December 2024), it has received ₹ 36,690.93 crore, as per provisional figures from Comptroller and Auditor General of India.
Tamil Nadu’s share of Central taxes is 4.079%, as recommended by the 15th Finance Commission. The DMK government has been pointing out that the State has been getting a much lower share of Central taxes due to the levy of cesses and surcharges.
The 15th Finance Commission had recommended the share of states in the shareable Central taxes or central tax devolution at 41% for its award period of FY2022 to FY2026. However, the effective rate of devolution relative to the gross tax revenues of the government of India tends to be closer to 30-33%, as cess and surcharges are not included in the shareable pool, according to ratings firm ICRA.
Published – January 31, 2025 06:19 pm IST
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Union Budget 2025: Focus on whether Tamil Nadu’s requests would find a mention
