Chennai: Tamil Nadu Finance Minister Thangam Thennarasu on Tuesday criticised the 16th Finance Commission recommendations, calling the report a “great disappointment” for the State as it retained the State’s share in the divisible pool of central taxes at 41 per cent.

Presenting the Interim Budget in the Tamil Nadu Legislative Assembly, Thennarasu said the Commission had failed to address the “legitimate concerns” of States that had unanimously sought a higher share in central tax devolution.

The 16th Finance Commission recently submitted its report, and the Union Government tabled the Action Taken Report in Parliament on February 1, 2026. Despite repeated demands from States for a larger allocation from the divisible pool, the Commission recommended maintaining the devolution at 41 per cent.

Thennarasu said Tamil Nadu’s concerns over the Centre’s increasing levy of cesses and surcharges, which are not shared with States, were not reflected in the recommendations. He alleged that the State had once again been unfairly treated in the distribution of central taxes.

“Among States, yet again, Tamil Nadu has been unfairly treated by the Commission by not giving us 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,” Thennarasu said.

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Highlighting inter-state disparities in tax devolution, the Minister noted that neighbouring Kerala and Karnataka had received higher growth rates in allocation under the 16th Finance Commission. Kerala recorded a 23.74 per cent increase, Karnataka 13.27 per cent, while Tamil Nadu saw a marginal rise of just 0.44 per cent, the lowest among comparable States.

“We were not seeking generosity, but justice to ensure equality, and this Commission has failed in this regard,” he said.

Tamil Nadu tourism policy, investment push

Amid concerns over fiscal devolution and central tax allocation, Thennarasu also outlined measures to boost Tamil Nadu’s economic growth. He said the State had unveiled a new Tourism Policy aimed at attracting private sector investment and creating employment.

At the recent Global Tourism Summit held in Mamallapuram, the Tamil Nadu government signed Memoranda of Understanding (MoUs) with 127 companies, securing proposed investments worth Rs 22,794 crore.

The Finance Minister said the tourism sector would play a significant role in driving economic growth, job creation and regional development across Tamil Nadu.

ANI