Eye on polls, Tamil Nadu budget empowers women; blames Centre for creating ‘fiscal crisis’

In one of the longest budget speeches in the history of Tamil Nadu assembly, finance minister Thangam Thenarasu presented the interim budget for 2026-27, highlighting significant allocations for social welfare and infrastructure amid tough fiscal challenges.

Coming as it does ahead of the assembly elections due in April, the interim budget underscores fiscal priorities and political stakes in Tamil Nadu’s governance.

The budget earmarks Rs 4,000 crore for the Vidiyal Payanam scheme, providing fare-free bus travel for women, alongside Rs 1,782 crore for student bus fare subsidies and Rs 1,857 crore in diesel subsidies. Overall, the Transport Department is allocated Rs 13,062 crore. Additionally, a Rs 2,000 crore Viability Gap Fund was introduced to improve transport corporations’ efficiency and finances.

The budget projects a revenue deficit of Rs 48,696.32 crore and targets a fiscal deficit near 3% of GSDP, signaling the state government's resolve toward fiscal discipline despite hurdles. Total borrowing is estimated at Rs 1,79,809.65 crore, with repayments of Rs 60,413.42 crore, pushing the loan outstanding to over Rs 10.7 lakh crore by the end of 2027.

However, the finance minister did not shy from criticising the Union Government, alleging attempts to engineer a fiscal crisis in Tamil Nadu through withholding project sanctions, grants, and arbitrarily reducing revenues without consultation. He expressed disappointment over the 16th Finance Commission’s recommendations retaining the states’ share in national taxes at 41 per cent, and its failure to address increasing cess and surcharges, which he described as detrimental to Tamil Nadu’s fiscal health.

On infrastructure, the highly anticipated Chennai Metro Rail phase-II (118.9 km) is making rapid progress, with regulatory clearances awaited for the first stage from Poonamallee bypass to Porur. The government is also urging the Centre to reassess metro projects for Coimbatore and Madurai, noting that similar projects have been approved elsewhere in India.

(With agency inputs)