T.N. seeks the release of ₹11,185 crore worth of pending compensation dues from the Central government

State Finance Minister Palanivel Thiaga Rajan points out the ‘continuous neglect’ of the State in railway projects and requested for adequate fund allocation in the upcoming Union Budget

The Tamil Nadu government on Friday requested the Centre to release the pending compensation of ₹11,185.82 crore due to the State, as it was expecting a revenue shortfall. It also requested for extending the GST compensation period by at least two more years.

During his speech in the pre-Union Budget meeting in New Delhi, Tamil Nadu Finance Minister Palanivel Thiaga Rajan pointed to the “continuous neglect” of Tamil Nadu in railway projects and requested for adequate fund allocation in the upcoming Union Budget.

Vande Bharat trains connecting Chennai with Madurai and Coimbatore, a fourth railway line between Tambaram and Chengalpattu, a third and fourth railway line between Attipattu and Gummidipoondi, a new railway line from Tirupattur-Krishnagiri-Hosur and the doubling of the Arakanom-Kancheepuram-Chengalpattu line were among the projects he sought the Centre’s sanction for necessary funding.

The practice of the Union government in continuously increasing the levy of cesses and surcharges was “antithetical” to the spirit of fiscal federalism, Mr. Rajan contended and pointed out that the cesses and surcharges, which did not form a part of the divisible pool of taxes, have adversely affected the transfer of resources to the States.

The State’s fiscal autonomy has further been curtailed by the increasing ratio of grants-in-aid to share in Central taxes, he pointed out, and further requested the Union government to provide greater untied funding to the States, rather than a one-size-fits-all homogenisation through increasingly detailed Central schemes.

The Minister urged the Centre to ensure that State-specific grants be released in full without imposing any conditions, respecting the convention wherein the recommendations of the Commission were treated as an award.

As the unit costs and the Government of India’s share of the cost in many Centrally-sponsored schemes were not in consonance with the ground realities, he requested the Union government to enhance the unit costs to reflect the present day requirements and increase its proportion in them.