“A Greater Disappointment Than Usual”
Reacting sharply to the Union Budget 2026–27, MK Stalin said the budget, which was eagerly awaited, has delivered “an even greater disappointment than usual.” The Chief Minister expressed frustration that despite repeated appeals and the state’s economic contribution, Tamil Nadu continues to be sidelined in central financial planning.
Referring to the upcoming Tamil Nadu Legislative Assembly elections, Stalin said the state had hoped that at least this year its concerns would be acknowledged by the Union BJP government. Instead, he said, those expectations were “shattered,” reinforcing what he described as a pattern of neglect.
“No Schemes for Any Section of Society”
Criticizing the broader framework of the budget, Stalin alleged that the Union Budget 2026-27 contains no major schemes that would benefit any section of society—including the poor, women, farmers, or marginalized communities.
According to him, the budget lacks both vision and inclusiveness, failing to address socio-economic challenges at a time when inflation, employment concerns, and welfare demands remain pressing across states.
Tax Devolution: Core Grievance with the Union Government
A central pillar of Stalin’s criticism focused on tax devolution to states. He reiterated Tamil Nadu’s long-standing demand to increase the states’ share in total tax revenues from 41 percent to 50 percent, a demand that, he said, has once again been ignored.
“The announcement that the states’ share will continue to remain at just 41 percent is deeply disappointing,” Stalin stated, adding that developed states like Tamil Nadu continue to be penalized despite contributing significantly to national revenue.
Finance Commission Allocation Sparks Outrage
Raising concerns over Finance Commission recommendations, the Chief Minister said it was highly regrettable that Tamil Nadu — India’s second-largest state economy and a major contributor to national growth — has been allotted a lower share of financial devolution compared to other developed states.
Stalin revealed that Tamil Nadu’s share of tax devolution is expected to remain at just 4.097 percent over the next 5 years, resulting in an estimated annual loss of around Rs 5,000 crore when compared with similarly placed states.
GST Impact and Revenue Losses
Highlighting GST-related challenges, Stalin said that while the Goods and Services Tax reforms have already adversely impacted state revenues, Tamil Nadu’s share in Union taxes has been further reduced by approximately Rs 1,200 crore this year.
This reduction, he argued, compounds fiscal stress and restricts the state’s ability to invest in welfare and infrastructure.
Sharp Cuts in Key Welfare Schemes
The chief minister expressed serious concern over drastic cuts in flagship central schemes:
Jal Jeevan Mission
Rs 3,112 crore pending to Tamil Nadu
Allocation reduced from Rs 67,000 crore (2025-26 BE) to Rs 17,000 crore (RE)
Stalin called it an attempt to “completely stall the scheme.”
Pradhan Mantri Gram Sadak Yojana (Rural Roads)
Allocation cut from Rs 19,000 crore to Rs 11,000 crore
Pradhan Mantri Awas Yojana (Rural Housing)
Reduced from Rs 35,832 crore to Rs 32,500 crore
PM Internship Scheme
Reduced drastically from Rs 10,831 crore to Rs 526 crore, which Stalin termed a “major failure.”
Education and Language Policy Fallout
Stalin also pointed to the non-release of Rs 3,548 crore under the Samagra Shiksha scheme, linked to Tamil Nadu’s refusal to implement the three-language policy. He said the budget makes no mention of resolving these pending dues, further deepening Centre–State tensions.
“Step-Motherly Treatment” Allegation
The absence of any new scheme specifically for Tamil Nadu, Stalin said, exposes the “stepmotherly attitude” of the Union Government towards the state. He even noted that the customary Thirukkural verse usually included in the finance minister’s budget speech was missing this time—a symbolic omission, according to him.
“In total, it is disappointment,” the chief minister concluded.
Rare Earth Corridors: A Partial Counterpoint
The union government, however, announced the establishment of dedicated rare earth corridors to support mineral-rich states, including Tamil Nadu, along with Odisha, Kerala, and Andhra Pradesh. These corridors aim to promote mining, processing, research, and manufacturing in critical minerals.
While this announcement includes Tamil Nadu, opposition leaders argue that it does not offset the broader fiscal and welfare-related concerns raised by the state.
