Chennai, February 17 Tamil Nadu Finance Minister Thangam Thenarasu presented the Interim Budget for 2026-27 in the state Assembly on Tuesday and allocated Rs 4,000 crore for the fare-free bus travel scheme for women, and made allocations towards all other flagship schemes of the DMK government.
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 that in a federal polity, there have been 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 of major infrastructure projects for Tamil Nadu, withholding of release of funds for centrally sponsored schemes, curtailment of tax revenues without due consultation, or unfair imposition of conditions to mandate expenditure, the union government appears to leave no stone unturned to artificially precipitate a fiscal crisis in Tamil Nadu."
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.
In the Interim Budget Estimates for 2026-27, the Fiscal Deficit is estimated to reduce to 3 per cent of GSDP, showcasing the government’s commitment to the path of fiscal consolidation despite several challenges faced on the economy and fiscal fronts.
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.
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.