Tamil Nadu Finance Minister Thangam Thennarasu presented the interim budget for the 2026–27 financial year in the State Assembly, setting the tone for fiscal planning in an election year.
The budget focuses on sustaining welfare schemes, boosting infrastructure, and supporting economic growth while ensuring continuity in public spending ahead of assembly polls.
Women’s Welfare & Social Security
The budget prioritises initiatives for women and marginalised communities. Under the Vidiyal Payanam scheme, women have reportedly completed 881 crore safe trips, and the Kalaignar Magalir Urimai Thogai scheme continues to benefit thousands, with recent advances and summer relief totaling Rs 5,000 per beneficiary. Monthly allowances for persons with disabilities have been increased to Rs 2,000 for families unable to support them, and individual assistance has risen to Rs 1,500, benefiting over 8.5 lakh people. Four percent reservation for persons with disabilities has also been extended to promotions in government jobs.
Education and Skill Development
Education remains a major focus, with Rs 48,534 crore allocated for school education and Rs 8,505 crore for higher education. The Tamil Pudhalvan scheme encourages men to pursue higher studies, aiding over 5.4 lakh students with monthly assistance. Free laptops have been distributed to 6.65 lakh students, and 40 new government vocational training centers have been planned with an allocation of Rs 291 crore.
Health and Medical Infrastructure
The Health Department has been allocated Rs 22,090 crore, emphasising strengthened public health services and infrastructure. The interim budget also includes Rs 15,591 crore for combined drinking water supply schemes and Rs 3,109 crore for Chennai’s ring main pipeline project. Additionally, the Mamallan Reservoir near Chennai will be constructed at a cost of Rs 342 crore to enhance water supply.
Infrastructure & Urban Development
Significant investments have been proposed in infrastructure and urban development. Rs 7,547 crore is allocated for housing and urban projects, while the Rural Road Project receives Rs 8,911 crore. Riverfront development projects in Tiruchirappalli, Madurai, Erode, Coimbatore, and Tirunelveli covering major rivers like Cauvery, Vaigai, Noyyal, and Thamirabarani will be implemented with a budget of Rs 374 crore. Additionally, Chennai flood mitigation works are set at Rs 1,618 crore, with new sewage treatment parks planned for Rs 374 crore.
Transport and Connectivity
The transport sector receives a major boost with Rs 13,062 crore allocated, including funds for the purchase of 12,000 new buses and widening 1,885 km of roads into four lanes at a cost of Rs 8,313 crore. The Women’s Morning Travel Scheme is allocated Rs 4,000 crore to ensure safe commuting for women. Plans are also underway for the Tamil Nadu Knowledge City and a Global City near Chennai, along with India’s largest workers’ hostel at Sriperumbudur.
Industry, Energy, and Technology
The budget supports industrial growth with allocations of Rs 1,943 crore for textiles and Khadi, Rs 1,943 crore for MSMEs, and Rs 500 crore for the Tamil Nadu Semiconductor Project. The Energy Department receives Rs 18,301 crore, while the Water Resources Department is allocated Rs 10,076 crore. IT and Digital Services receive Rs 219 crore, including initiatives to improve high-speed internet connectivity in 95% of villages. Collaborations with IIT Madras are planned for advanced semiconductor technology centers.
Heritage, Culture & Tourism
Cultural and heritage projects receive targeted support with Rs 58 crore for the development of ancient mosques and dargahs, Rs 25 crore for the renovation of ancient temples, and Rs 285 crore for new museums and galleries, including sites at Thanjavur, Gangaikondacholapuram, Erode, Ramanathapuram, Chennai, and Tiruvannamalai. Tourism receives Rs 1,394 crore to further promote the state’s cultural and historical assets.
Economic Growth & Public Support
The interim budget emphasises inclusivity, rural development, and social welfare. Crop loan waivers of Rs 12,359 crore have been provided, while Rs 1.40 lakh crore in loans were extended to self-help groups. North Chennai Development projects are budgeted at Rs 6,045 crore, and housing initiatives for sanitation workers aim to provide 30,000 additional homes. Over 23.5 lakh house-site pattas have been issued in the past five years.
The 2026–27 interim budget demonstrates the Tamil Nadu government’s focus on continuity, welfare, infrastructure, and inclusive growth while preparing for upcoming elections. With significant allocations across education, health, transport, and social welfare, the budget aims to strengthen both the state’s economy and the well-being of its citizens.