VILLUPURAM: PMK President and Rajya Sabha MP Anbumani Ramadoss expressed concern over the declining share of fund allocations by the Union government to Tamil Nadu over the years.
In a statement on Monday, he highlighted that Tamil Nadu's share in the Union government’s tax revenue, which was 7.931% during the 9th Finance Commission, has fallen to around 4%, effectively halving the state’s share. He highlighted the need for a change in the tax distribution policy, which he said is currently disadvantaging Tamil Nadu.
In a letter addressed to the chairman of the 16th Finance Commission, Arvind Panagariya, Ramadoss noted that since the establishment of the first Finance Commission in 1952, there has been an increasing disparity in fund allocations to states like Tamil Nadu.
Despite contributing 10% of the total tax revenue to the Union government, Tamil Nadu receives only 4.079% in return. According to state government statistics, Tamil Nadu gets just 29 paise for every rupee contributed—a disproportionately low share, he said.
“The state’s share dropped from 8.4% in the 1950s to 4.09% under the 15th Finance Commission. Over the last 30 years, this decline has led to an estimated revenue loss of ₹3.57 lakh crore,” he stated.
He further argued that Tamil Nadu is classified as a developed state based on parameters set by the Union government. “However, the ground reality reveals significant gaps in essential sectors such as education and healthcare. For 2024-25, Tamil Nadu has allocated only ₹44,042 crore (1.39% of the state GDP) to education and ₹21,198 crore (0.64%) to healthcare—far below the recommended benchmarks of 6% and 3%, respectively,” he noted.
Ramadoss also pointed out that the introduction of GST in 2017 has restricted states’ taxing rights to fuel and alcohol, thereby limiting their revenue-generation opportunities. He urged the Union government to increase the revenue share allocated to states from 41% to 50%.
“At least 50% of the tax revenue generated by each state should be returned to that state. The Centre must stop levying cess on taxes. If levied, the cess revenue should also be shared with the states,” he asserted.
The PMK called on the Finance Commission and the Union government to adopt a more equitable and transparent revenue-sharing policy to ensure that Tamil Nadu receives its fair share, enabling the state to fund critical development projects in education, healthcare, agriculture, housing, and transport infrastructure.
PMK remains steadfast in its commitment to securing justice for Tamil Nadu and reiterates its demand for fair and transparent fiscal federalism, he said.
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