Thennarsu Wants Release Of Funds For States

Chennai: State Finance Minister Thangam Thenarasu urged the Union Government to release funds due to the State for implementing various projects, like the pending Rs 3,113 crore central share for the Jal Jeevan Mission and funds for the ongoing Chennai Metro Rail Phase-II Project that was approved in October 2024, forcing the State to incur an expenditure of about Rs 9,500 crore as advance payment.

Addressing a meeting of State Finance Ministers convened by Union Finance Minister Nirmala Sitharaman to seek their suggestions for upcoming Union Budget on Friday, he said the forum was crucial for furthering cooperative fiscal federalism and made use of it to raise a slew of issues relating to non-release of funds.

Urging the Union Government to reconsider the State’s proposal for metro rail projects in Madurai and Coimbatore, he drew her attention to the serious impact being caused on the economy of Tamil Nadu due to the tariff hikes by the United States. ‘With 31% of Tamil Nadu’s goods exports destined for the US market, these measures affect the State more severely than most others, with significant implications for manufacturing and employment’ he said.

Among the major sectors, textiles was the most affected as Tamil Nadu accounted for 28% of India’s textile exports and provided employment to more than 75 lakh workers, he said. An estimated 30 lakh jobs were at immediate risk, with many MSME units facing closure, he requested the Union Government to consider a dedicated support package for the textile sector to protect employment and maintain export competitiveness.

Another concern he raised at the forum was the loss of revenue under the GST regime, saying that even as States were coping with fiscal stress after the termination of the GST compensation regime, the recent GST rate rationalization had further led to an estimated revenue loss of about Rs 10,000 crore in the current financial year.

While the States were receiving constant fiscal shocks under GST and their share in central taxes were being reduced through the indiscriminate use of cesses and surcharges, the Union Government was continuously shifting the burden of Centrally Sponsored Schemes on to the State Governments, he said and referred to the introduction of the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Grameen) Act that had effectively stifled the globally acclaimed rural employment guarantee scheme.

Calling it a retrograde step that would have a deleterious impact on the rural economy and wage rates for agricultural labour, he said the financial burden on States would be increased manifold due to the new funding pattern.

Stating that the Union Government had not released the approved share of the State under the Samagra Shiksha Scheme for the years 2024-25 and 2025-26, amounting to Rs 3,548 crore, he said the financial burden of Centrally Sponsored Schemes was further increasing due to the non-revision of unit costs, which no longer reflected current market realities.

Under the Pradhan Mantri Awas Yojana – Rural and Urban, the Union Government’s contribution is only about 30% and 10% of the total house cost respectively, with the remaining burden falling on the State, he said and requested the Union Government to revise unit costs in the upcoming Budget and to consider contributing at least 75% of the total expenditure under Centrally Sponsored Schemes.

Requesting the sanction of five railway projects in Tamil Nadu in the upcoming Budget, he demanded more national highway projects in the State.