Tamil Nadu Interim Budget: 16th Finance Commission report a disappointment, says Thangam Thennarasu

Finance Minister Thangam Thennarasu on Tuesday, February 17, 2026, reiterated that the report of the 16th Finance Commission is a huge disappointment for the State of Tamil Nadu.

Presenting the Interim Budget 2026-27 in the Legislative Assembly, Mr. Thennarasu said that even when all States are unquestionably seeking a higher share in the divisible pool of central taxes, the 16th^This The Finance Commission had recommended keeping the share at 41%. “It is disappointing to see that our serious concerns about increased withholding and surcharges are not included in the Commission’s recommendations,” he said.

Read the full budget speech here.

He said that among the states, Tamil Nadu was once again subjected to “unfair treatment” by the Commission for not giving “our rightful and legitimate share”. since 9^This The Finance Commission stated that while our share was 7.9%, successive finance commissions reduced it to 4.079%, leading to a loss of Rs 3.17 lakh crore, equivalent to about 33% of our outstanding debt, the Minister said.

“On the 16th^This The Finance Commission gave a growth of 23.74% and 13.27% respectively to our neighboring states Kerala and Karnataka, while giving a marginal increase of 0.44% to Tamil Nadu; this is the lowest rate among comparable States. “It is once again emphasized that we seek justice, not generosity, to ensure equality, and that this Commission has failed in this regard,” he said.

To clarify the State’s position, Mr. Thennarasu quoted former Chief Minister M. Karunanidhi’s Budget speech in 1971-72: “The power to collect taxes is concentrated in the Union government. However, the main responsibility for expenditure to protect and promote public welfare lies with the State governments. This peculiar situation of authority on one side and responsibility on the other is the root cause of most of our problems. We, therefore, believe that the present system of revenue sharing must be done. If necessary, the Constitution itself should be amended for this purpose.”

Mr. Thennarsu summarized the situation as follows: “The situation expressed with concern by Muthamizh Arignar Kalaignar is truly regrettable. [M.Karunanidhi] It remains unchanged even today, half a century ago.”