Union Finance Minister Nirmala Sitharaman’s detailed response to the Tamil Nadu-led DMK government’s alleged false claims that they are not receiving any financial assistance from the Union Government aims to counter the narrative of financial neglect and underscores the government’s commitment to addressing the economic concerns of Tamil Nadu.
The cash-strapped government is actively exploring avenues to address its financial challenges, including seeking unspent Corporate Social Responsibility (CSR) funds and interim dividends from state enterprises.
In a recent public appearance alongside Prime Minister Narendra Modi at the inauguration of the second terminal at Trichy airport and the convocation ceremony of Bharathidasan University, Tamil Nadu Chief Minister MK Stalin enumerated the various developmental programmes undertaken by his government. During his address, he urged the Centre to allocate additional funds, particularly in light of the recent floods in the state. Stalin, emphasising the severity of the situation, called for the floods to be declared a “calamity of severe nature” and requested the necessary funds for relief and rehabilitation efforts.
Reading from a prepared text, Stalin asserted, “Don’t think that we are reiterating our demands. In a country as vast as India, the primary duty of providing education, healthcare, and other basic help to crores of people is vested with the state governments. Coming up with requests for the state and reinforcing states’ rights are genuine demands of the state and not mere political slogans.”
Responding to these appeals, Prime Minister Modi provided a detailed account of various schemes implemented by the Union Government for the state of Tamil Nadu. He highlighted that in the decade before 2014, states were allocated Rs 30 lakh crore, whereas in the last 10 years, the figure has risen to Rs 120 lakh crore. PM Modi assured that the Union government stands in solidarity with the people of Tamil Nadu during this crisis, extending all possible support to the state government.
Meanwhile, Tamil Nadu’s Sports Minister, Udhaya Nidhi Stalin, known for his involvement in the eradication of Sanatana Dharma, took to his social media platform to announce that he had requested the Prime Minister to invite him for the Khelo India programme. Through his official handle, he posted, “On behalf of the Tamil Nadu Government, I requested the Prime Minister for the immediate release of the National Disaster Relief Fund to undertake comprehensive relief, restoration, and rehabilitation works in flood-affected districts of TN as requested by our Chief Minister, MK Stalin. The Prime Minister assured us that he would take the necessary steps.”
Amidst the ongoing challenges faced by the state, TN Finance Secretary T Udhayachandran communicated with the CEOs of all government enterprises and state PSUs. He highlighted the persistent revenue crunch despite ongoing social welfare initiatives, prompting the government of Tamil Nadu to explore alternative support measures. The state is specifically seeking unspent Corporate Social Responsibility (CSR) funds to bolster its resources. Udhayachandran clarified that there is no specific target for fund collection, emphasising the state’s need to address financial constraints.
As of November 30, 2023, the state’s total tax revenue amounted to Rs. 1.27 lakh crore, representing approximately 57 percent of the budgeted estimates, according to CAG data. The state’s revenue deficit during this period stood at just over Rs. 24,000 crore, as opposed to the projected Rs. 37,540 crore for the entire financial year 2023-24. The finance secretary’s communication sheds light on the fiscal challenges faced by Tamil Nadu and its proactive approach to securing additional support for its economic and relief initiatives.
Tamil Nadu BJP President Annamalai has challenged the Dravidian model of the DMK, accusing it of securing the top spot in borrowing loans and liquor sales. In a public meeting, he asserted that the state had borrowed a staggering Rs 8.34 lakh crore, with each Public Distribution System (PDS) cardholder carrying a debt of Rs 3.81 lakh. Annamalai also highlighted the state’s ambitious target of Rs 52,000 crore in liquor sales through TASMAC outlets.
Amidst these allegations, Union Finance Minister Nirmala Sitharaman responded to the DMK government’s claims that the Modi government had not allocated sufficient funds to Tamil Nadu. Speaking at the inauguration of the Visit Bharat Sankalp Yatra in Chennai, Sitharaman refuted the accusations. She stated, “Based on the recommendations of the Union Finance Commission, Tamil Nadu received Rs 2.88 lakh crore as tax devolution from 2014-15 to 2023-24 and Rs. 2.58 lakh crore as grants in the same period.” Additionally, she mentioned that the Prime Minister had provided Rs. 6,412 crore as special assistance for capital infrastructure, following the recommendations of the Union Finance Commission, with a repayment period of 50 years without interest.
Sitharaman clarified, “When all these figures are combined, Tamil Nadu has received a total of Rs. 6.96 lakh crore. In comparison, the state’s contribution in direct taxes, including income tax and corporate tax, from 2014 to 2022-23 is Rs. 6.23 lakh crore.” Regarding GST, she noted that in the year 2022-23, Tamil Nadu received Rs. 36,353 crore under state GST, Rs. 32,611 crore under IGST, and Rs. 27,360 crore under Central GST, in accordance with the Finance Commission’s recommendations.
The Finance Minister provided a breakdown of fund allocation, stating, “From 2014-15 to 2023-24, Tamil Nadu received Rs. 57,557 crore as cess. Out of the total funds, Rs. 37,955 crore was allocated to NHAI for road construction, Rs. 11,116 crore for schools, Rs. 4,839 crore for PMAY (R), and Rs. 3,734 crore for the rural roads project (Gram Sadak Yojana).”
Sitharaman reiterated that the Union government was not withholding funds but actively investing in public welfare. She emphasised that the devolution of direct taxes to the states is determined by the Finance Commission and emphasized that there is no animosity towards Tamil Nadu in this regard.
Despite these clarifications, the DMK and its allies continue to propagate unfounded claims that the BJP-led Modi government is withholding funds and displaying a step-motherly attitude towards Tamil Nadu. The ongoing political narrative underscores the tensions between the central government and the opposition in the state.