Tamil Nadu Budget snubs populism, with focus on infra, women, and students

Chennai: Refraining from being populist in an election year, the Tamil Nadu Budget for the 2024-25 financial year laid much stress on augmenting infrastructure in the state, focussed on the development of women and students through new welfare schemes, and announced a fresh program to make the state slum-free.

Presenting his first Budget, Finance Minister Thangam Thennarasu said the revenue deficit increased to Rs 44,907 crore as compared to Rs 37,540 crore in the Budget estimates, even as the state’s debt is set to rise to Rs 8.33 lakh crore as on March 31, 2025 with the state planning to borrow Rs 1.55 lakh during 2024-25 and make repayment of Rs 49,638.82 crore.

He said the revenue deficit rose despite “strict financial prudence” by the government through a slew of initiatives due to “unavoidable” spending with regard to relief given to people affected by floods in eight districts and their rehabilitation.

Key announcements of the Budget include covering of all educational expenses including tuition and hostel fees for transgender individuals who want to pursue higher education and payroll subsidy of 10 per cent of the salaries of women, differently-abled and transgender employees for two years to all new industrial units that employ more than 500 such people.

Besides upgrading infrastructure in several hospitals, the government will set up a Centre of Excellence for Persons with Autism Spectrum Disorder in Chennai at a cost of Rs 25 crore to provide comprehensive services under a single roof.

The Minister and Finance Secretary T Udhayachandran, who addressed a press conference, said the Union Government not approving the Phase-II of the Chennai Metro Rail Corporation (CMRL) has put “great strain” on the state’s finances with Rs 9,000 crore being spent in 2023 and Rs 12,000 crore planned to be spent in 2024 from the TN government’s funds.

Thennarasu, in his Budget speech, expressed the hope that the 16th Finance Commission will come out with a “fair mechanism” by reversing the “historical injustice” meted out to progressive states so that they receive their due share commensurate to their role in nation building, without being penalized for development.

“Our goal was to strike a fine balance between welfare schemes and the focus on infrastructure. We are finding ways to generate more financial resources and we have put in place a robust mechanism to bring in fiscal prudence,” Udhayachandran said.

The Budget, which focussed on seven themes—social justice, welfare of the marginalised, transforming young Tamils into global achievers, welfare of women, a knowledge-based economy, sustainable green future, Tamil Language, and culture—gave maximum allocation to the School Education Department at Rs 44,042 crores.

A whopping Rs 47,681 crore, an increase of 12.1 per cent over 2023-24 fiscal, will be spent on capital expenditure of various sectors with roads and bridges getting the lion’s share at Rs 17,890 crore. Water supply schemes (Rs 9,535 crore), water bodies (Rs 4,747 crore), education and health sector (Rs 2,810 crore), and urban development (Rs 3,767 crore) make up much of the rest of the planned capital expenditure in various sector.

A major scheme to make Tamil Nadu a hut-free state will be implemented at a cost of Rs 3,500 crore under which 8 lakh concrete houses with Rs 3.5 lakh as cost per unit will be constructed by 2030, while efforts will be taken to lift five lakh people out of poverty over the next two years.

Focussing on education, the Budget announced Tamil Pudhalvan at a cost of Rs 360 crore under which male students from government and aided schools will receive Rs 1,000 as monthly assistance once they enroll for an undergraduate course. A similar scheme for female students will also be extended, while the popular Chief Minister’s Breakfast Scheme will be expanded to cover students from class one to five of government-aided schools in rural areas.

The state government will also set up 10 new Industrial Training Institutes (ITIs) in backward areas in the state with smart classrooms to enhance the learning skill of students, at a cost of Rs 111 crore.

A total of Rs 13,720 crore was allotted for the Kalaignar Urimai Thittam, under which 1.15 crore women get monthly assistance of Rs 1,000. The Budget also announced expansion of the free bus travel scheme for women in hilly areas of the state.

The archaeology department also got a significant fund allocation with Rs 5 crore for excavations in the state and Rs 17 crore for constructing an open-air auditorium in Keeladi, a Sangam-era site near Madurai, while the tourism sector also get several projects that includes infrastructure augmentation.

Laying stress on urban development, the Budget said the proposals for building metro projects in Madurai and Coimbatore and to extend the metro network from Airport to Kilambakkam bus terminus have been submitted to the Centre. The state government will study the feasibility of building metro networks from Poonamallee to Parandur, the proposed site for a greenfield airport for Chennai, and Koyambedu to Avadi.

To ensure that sports talent from Tamil Nadu succeed in the Olympics, four Olympic Academies will be established in Chennai, Madurai, Trichy, and the Nilgiris to provide world-class training in various sports, while the country’s first Olympic Water Sports Academy will be established in Ramanathapuram district.

Apart from an exclusive project to redevelop North Chennai, perceived to be a backward region, the government will take up 22 permanent flood prevention and mitigation works at a cost of Rs 350 crore in Chennai, while Rs 280 crore will be spent to restore the damages caused by the unprecedented rainfall and consequent flooding in the southern districts.

Contending that Tamil Nadu stands as a paragon of natural conservation, the Budget announced TN SHORE at an estimated cost of Rs 1,675 crore that aims to restore coastal resources across 14 coastal districts of the state, covering a stretch of 1,076 km.

“This initiative will capitalize on the potential of the Blue Economy and will primarily focus on the restoration of mangroves, coral reefs, and salt marshes. Works for conserving mangroves and reviving coral reefs at Kariyachalli islands in the Gulf of Mannar will be undertaken,” the Budget document said.

Finding ways to generate additional revenue for the state, the Budget announced the construction of a 27-storied iconic building with heritage design, spanning approximately 10 lakh square feet opposite to the Chennai Central Railway Station at a cost of Rs 688 crore, while a multi-modal bus terminus and office complex will be built in Parry’s Corner and three bus terminuses will be modernized along with office and commercial complexes.

In the Budget estimates for 2024-25, the total revenue expenditure is estimated at Rs 3,48,289 crore. Besides the standard increase in committed expenditure in salaries, pensions and interest payments, the allocation for Subsidies and Transfers has been fixed at Rs 1,46,908 crore, Thennarasu said.

“This increase is primarily owing to an additional expenditure of Rs 5,696 crore under the Kalaignar Magalir Urimai Thogai Thittam over the previous year, to provide for its first full year of implementation,” the minister said, adding that in aggregate, the revenue deficit is estimated at Rs 49,279 crore in Budget estimates 2024-25.