Chennai, June 18:
The Tamil Nadu Assembly will adopt a resolution demanding its due share of financial devolution from the taxes from the Centre besides forming a Special Legal Committee to legally pursue this in the Supreme Court, besudes publishing a report detailing the Centre’s discriminatory approach towards the state, Governor R V Arlekar announced in the State Assembly on Thursday.
Delivering his maiden customary address to the House on the first day of the first session of the new TVK government headed by Chief Minister Vijay, the Governor said apart from passing the resolution seeking TN’s due share of financial devolution from the taxes contributed to the Union Government, it would constitute the Special Legal Committee to legally pursue the issue up to the Supreme Court, in order to secure fair financial devolution.
He said every rupee due to Tamil Nadu will be properly documented and a report detailing the Union Government’s discriminatory approach toward the financial devolution for Tamil Nadu will be published. Further, it will be ensured that Tamil Nadu receives its rightful share of financial devolution from the Centre.
“This Government will work diligently to continuously press the Union Government to safeguard the welfare of Tamil Nadu, to fight for State rights, to implement required schemes for the State and to create new infrastructure”, he added.
Observing that over the past few years Tamil Nadu’s financial position has faced a very severe deterioration, Mr Arlekar said as promised by the Chief Minister in his first public address after assuming office, his Government has released a White Paper on Tamil Nadu’s finances to bring out the truth of the previous Government’s fiscal mismanagement. In the last five years alone, the debt has nearly doubled, reaching the level of Rs.10 lakh crore; this currently amounts to 28.3 per cent of the Gross State Domestic Product (GSDP). As a result, every individual living in Tamil Nadu bears a debt burden of more than one lakh rupees.
The State’s revenue deficit which was Rs.48,840 crore in 2024-25 has risen to Rs.78,324 crore in 2025-26 in just one year, amounting to 2.2 per cent of the Gross State Domestic Product (GSDP). Nearly 23 per cent of total revenue receipts is spent on interest payments alone. Owing to revenue leakages and systematic corruption in the revenue and tax-collecting departments, tax revenue has 11 declined from 5.93 per cent of GSDP in the financial year 2021-22 to 5.45 per cent in 2025-26, he pointed out.
This Government has already begun coordinated measures to bring the diverted revenue that rightfully belongs to the Government into the State treasury. In order to bring the revenue that was diverted earlier back into the Government’s account, this Government has recently levied an additional privilege fee on liquor manufacturers, the Governor said.
Through this, revenues that were escaping credit to State exchequer have been regulated and channelized directly into the State’s exchequer, and the Government is expecting receipt of upto Rs 1,000 crore annually.
This Government is taking every measure to prevent all leakages in revenue receipts, as well as leakages in Government works and other Government expenditure, and to restore the State’s finances on to a sound path which will enable this Government to fully honour the promises it has made to the people of Tamil Nadu.