Chennai

Tamil Nadu Finance Minister Thangam Thennarasu on Tuesday expressed strong disappointment over the recommendations of the 16th Finance Commission, alleging that the report failed to address the legitimate concerns of states regarding their share in the divisible pool of central taxes.

Speaking in the Legislative Assembly while presenting the Interim Budget, Thennarasu said that despite unanimous demands from states for a higher share, the Commission has recommended retaining the states’ share at 41 per cent.

“The 16th Finance Commission recently submitted its report and the Action Taken Report was placed by the Union government in Parliament on February 1, 2026. The report has been a great disappointment to the State of Tamil Nadu,” he said. “Even when all states unequivocally sought a higher share in the divisible pool of central taxes, the Commission has recommended retaining it at 41 per cent. It is also disappointing that our serious concerns over the increasing levy of cesses and surcharges have not found place in its recommendations.”

The minister further alleged that Tamil Nadu has once again been unfairly treated in the distribution of central taxes, noting that the state’s share has steadily declined across successive Finance Commissions.

“Since the 9th Finance Commission, when our share stood at 7.931 per cent, successive commissions have reduced it to 4.079 per cent. This has resulted in a loss of ₹3.17 lakh crore, which is equivalent to about 33 per cent of our outstanding debt,” Thennarasu said.

Highlighting inter-state disparities, he pointed out that while neighbouring states such as Kerala and Karnataka have received substantial increases of 23.74 per cent and 13.27 per cent respectively, Tamil Nadu has been given only a marginal increase of 0.44 per cent — the lowest among comparable states.

“We were not seeking generosity, but justice to ensure equality. This Commission has failed in this regard,” he said.

Thennarasu also outlined steps taken by the state government to boost economic growth. Referring to the tourism sector, he said a new Tourism Policy has been released to attract private investment and generate employment.

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“Recognising the significant contribution tourism can make to economic growth, the government has released a new Tourism Policy. At the recently held Global Tourism Summit in Mamallapuram, MoUs were signed with 127 leading companies to attract investments worth ₹22,794 crore,” he added.