Chennai (Tamil Nadu) [India], February 17 : Tamil Nadu Finance Minister Thangam Thennarasu on Tuesday voiced strong disappointment over the recommendations of the 16th Finance Commission, stating that the report has failed to address the legitimate concerns of States regarding their share in the divisible pool of central taxes.
Speaking in the Legislative Assembly while presenting the Interim Budget, Thennarasu said that despite all States unanimously demanding a higher share in the divisible pool, the Commission has recommended retaining it at 41 per cent.
"The 16th Finance Commission had recently submitted its report and the Action taken report was placed by the Union Government in the Parliament on 01.02.2026. The 16th Finance Commission's report has been a great disappointment to the State of Tamil Nadu. Even when all States had unequivocally sought for a higher share in the divisible pool of central taxes, the 16th FC has recommended to retain the share at 41 per cent. It is disappointing to see that our serious concern towards the increasing levy of cesses and surcharges has not found place in the Commission's recommendations," said Thennarasu.
He further stated that Tamil Nadu's serious concerns about the Centre's increasing levy of cesses and surcharges have not been reflected in the Commission's recommendations. The Finance Minister alleged that Tamil Nadu has once again been unfairly treated in the distribution of central taxes. He noted that the State's share has steadily declined across successive Finance Commissions.
"Among States, yet again, Tamil Nadu has been unfairly treated by the Commission by not giving our due and legitimate share. Since the 9th Finance Commission, when our share was 7.931 per cent, successive finance commissions had reduced it to 4.079 per cent, leading to a loss of Rs.3.17 lakh crore which is equivalent to approximately 33 per cent of our outstanding debt," said Thennarasu.
Highlighting inter-state disparities, Thennarasu said that while neighbouring states have received substantial increases, Tamil Nadu has seen only a marginal rise.
"In the 16th Finance Commission, while our neighbouring States of Kerala and Karnataka have been given a growth of 23.74 per cent and 13.27 per cent respectively, the State of Tamil Nadu has been given a marginal increase of 0.44 per cent, which is lowest among comparable States. It is yet again emphasized that we were not seeking generosity, but justice to ensure equality, and this Commission has failed in this regard," he said.
Thennarasu also spoke about steps taken by the State government to promote economic growth. Referring to the tourism sector, he said a new Tourism Policy has been released to attract private investment and generate employment.
"Recognizing the significant contribution that the tourism sector can make to economic growth, the Government has released a new 'Tourism Policy' to attract private sector investments and generate employment opportunities. At the recently held Global Tourism Summit in Mamallapuram, Memoranda of Understanding (MoUs) were signed with 127 leading companies to attract an investment of Rs.22,794 crore," he said.
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