“Despite this (denial of funds), the state government will allocate funds keeping in mind the welfare of students and salaries of teachers,” said the FM, “This is to ensure that the education of government school students remains unaffected.”
Delivering the State Budget on the floor of the assembly, Thenarasu reiterated that there would be no compromise on Tamil Nadu’s firm stance on its two-language formula, even if it meant denial of education funds from the Centre.
The Tamil Nadu Budget this year was Thenarasu’s second, since he was appointed state finance minister in May 2023.
The FM announced that the state’s GSDP had registered a 14.49% growth in FY-25 (versus 13.71% last fiscal), while fiscal deficit saw a reduction to 3% of GSDP (versus 3.26% in FY-24).
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Similarly, while the state’s debt burden is expected to swell up to ₹9.29 lakh crore by March 31, 2026, the debt-to-GSDP ratio has shown steady reduction.
“Despite a decrease in overall debt, the total debt-to-GDP ratio for the state is expected to slightly increase from 26.41% in the 2024-25 estimates to 26.43%,” said the FM, “This figure will then decrease to 26.07% in the our FY-26 estimates, staying within the 28.70% limit set by the 15th Finance Commission.”
Tamil Nadu’s Fiscal deficit as percentage of GSDP has dropped to 3.26% of GSDP this fiscal, and projected to drop further to 3% of the GSDP in FY-26. Revenue deficit, however, rose to ₹46,468 crore in the present fiscal (versus ₹45,121 crore in FY-24), but is projected to fall to ₹41, 635 crore in FY-26.
The budget has allocated ₹10,500 crore for the second phase of the Chennai Metro Rail, as part of the project’s ongoing expansion plan covering 119 kilometers. The high-profile infrastructure project saw a near-similar allocation of ₹12,000 last year, as well.
On the industrial front, a series of key allocations have underlined the Tamil Nadu Government’s continuous commitment to developing industries across the state. A ₹500-crore allotment towards a Semiconductor Mission 2030 will see the Tamil Nadu Government develop semiconductor parks in Coimbatore, setting up two 100-acre centres.
A new airport has proposed in Rameshwaram, while ₹2,938 crore has been set aside towards expanding the Chennai, Coimbatore, Madurai, Trichy and Thoothukudi airports. The state has also mooted the possibility of turning the town of Hosur into a Global Capability Centre (GCC) hub, attracting investments in IT and R&D.
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