Tamil Nadu Chief Minister MK Stalin raised serious concerns on Monday over the worsening financial situation in the state, caused by the constant increase in the state’s financial contributions towards various Union government schemes. Addressing the issue, CM Stalin emphasized the need for a rise in the central tax share allocated to states, suggesting that a 50% share would allow Tamil Nadu to effectively implement development schemes and better manage its financial resources.
In his remarks, Stalin pointed out the financial strain on state governments due to two key factors: a reduction in the central tax share and an increase in the state’s own share of funding for joint schemes with the Union government. These factors, he stated, have been placing a heavy burden on the finances of states like Tamil Nadu.
“The financial situation in states like Tamil Nadu is getting increasingly affected due to the continuous rise in the state’s financial share for the schemes implemented in collaboration with the Union government,” said Stalin. “On one hand, we are seeing a reduction in the central tax share, and on the other, there is an increase in the state’s contribution towards Union schemes. This has created a significant financial burden for state governments. The central tax share to states should be increased to 50%, which will allow states like Tamil Nadu to implement their own development schemes and manage finances more efficiently.”
While acknowledging the Finance Commission’s recommendation to increase the central tax share to 41%, CM Stalin expressed disappointment that the Union government had only allocated 33.1% to the states over the past four years.
“The state governments are doing their part to implement essential schemes for the growth of sectors like health, education, social welfare, and agriculture. However, we are constrained by our limited power to generate additional income to manage the growth of these sectors effectively,” Stalin added.
CM Stalin’s remarks came during his meeting with the 16th Finance Commission, where he praised the Commission’s recommendations. He welcomed the Chairman and members of the Commission and expressed hope that their recommendations would contribute to the economic advancement of India and reinforce the nation’s federal structure.
“I believe the recommendations of the 16th Finance Commission should fulfill the expectations of all Indian states and play a significant role in making India a developed country. Strengthening India’s federal structure through these recommendations will pave the way for balanced growth across states,” CM Stalin concluded.
(WITH ANI INPUTS)
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