Union Budget 2026: Disappointing that states’ share in taxes remain unchanged: Stalin

Stalin said the demand of Tamil Nadu and other states that the share distributed to states in total tax revenue should be raised from 41 percent to 50 percent has been ignored this time as well.

Terming the Union Budget as a “disappointment”, Chief Minister M K Stalin on Sunday strongly opposed the Union Government’s decision to retain the share of states in the divisible pool of taxes for the next five years at 41 per cent and regretted that no remedial steps have been taken to correct the injustice meted out to states like Tamil Nadu.

In a statement, Stalin said it was very regrettable to note that Tamil Nadu, which has made huge contributions to the country’s growth, has been allotted a low share when compared to other developed states.

“Tax sharing for Tamil Nadu will be at a very meagre level of 4.097 percent for next five years. We will lose about Rs 5,000 crores annually. We are worried that the percentage of fiscal sharing for Tamil Nadu has not been increased in the 16th Finance Commission as well,” Stalin said.

He said the demand of Tamil Nadu and other states that the share distributed to states in total tax revenue should be raised from 41 percent to 50 percent has been ignored this time as well. “This has made us immensely disappointed,” he said, adding that his government was hoping that the Centre would at least open its eyes and see Tamil Nadu this time since elections are round the corner.

He also said the Rs 3,112 crore demanded by Tamil Nadu has not been released and the allocation for various schemes have been reduced. Stalin also criticised the Union Government for not releasing Rs 3,112 crore under Samagra Shiksha for not implementing the three-language policy.

“This shows clearly that the Union government is continuously treating Tamil Nadu with a step-motherly attitude. Usually in the Budget speech, Union Finance Minister Nirmala Sitharaman will recite a Thirukkural. But this time she missed that as well,” he added.

There were expectations that the state, where the BJP is in an alliance with the AIADMK, would get some major projects, with an eye on the elections.

The state only got three specific announcements including two high-speed rail corridors connecting Chennai with Bengaluru and Hyderabad, establishment of a Rare Earth Corridor, and a bird watching trails along the Pulicat lake in Tamil Nadu and Andhra Pradesh. Other announcements are development of ecologically sustainable mountain trails in Podhigai hills in southern Tamil Nadu and a cultural centre in Adichanallur, an Iron Age archaeology site.

Besides, the proposal to increase the outlay from Rs 22,919 crore to Rs 40,000 in the Electronics Components Manufacturing Scheme is likely to benefit Tamil Nadu, which has now emerged as the electronics hub of the country.

Sitharaman is the sixth Finance Minister from Tamil Nadu to have presented the Union Budget in independent India. Free India’s first budget was also presented by R K Shanmukham Chetty, a Tamil who was born in Coimbatore, on November 26, 1947. T T Krishnamachari (1957-1958 & 1963-1965), C Subramaniam (1975-1977), R Venkataraman (1980-1982), and Chidambaram also hailed from Tamil Nadu.