With the Tamil Nadu Assembly elections approaching, the state’s Finance Minister, Thangam Thennarasu, is set to unveil the TN Interim Budget for 2026-27 on Tuesday. In this election year, the focus is likely to be on welfare announcements and increased funding for existing schemes rather than new projects. The Minister will also present the Vote-on-Account for 2026-27 and Supplementary Estimates for 2025-26 on February 20.
Chief Minister M.K. Stalin has hinted at raising the monthly assistance under the Kalaignar Magalir Urimai Thittam from Rs 1,000 to Rs 2,000. This potential increase, along with a possible expansion of beneficiaries, is expected to have significant electoral implications. The government’s Assured Pension Scheme for state employees, including the release of an expert committee’s report, is also under scrutiny.
The state may address its infrastructure plans following the reported rejection of the Coimbatore and Madurai Metro Rail projects by the Centre. Anticipated measures include the expansion of the free bus travel scheme for women, introduction of more electric buses, and increased allocations for road and flyover projects in Chennai and other major cities. Additionally, public proposals under the Chief Minister’s “Speak Your Dream” initiative might receive financial backing.
Against a backdrop of robust economic performance, Tamil Nadu saw a 11.3% growth in 2024-25, with its Gross State Domestic Product (GSDP) reaching Rs 31.19 lakh crore, maintaining its position as India’s second-largest state economy. The manufacturing sector in the state recorded a growth of 14.74%, significantly higher than the national average of 4.5%, and accounts for 15% of India’s manufacturing employment. Despite the welfare focus, the government aims to reduce the fiscal deficit to 3% of GSDP by 2025-26, with a projected revenue deficit of 1.2%, indicating a balance between populist measures and fiscal responsibility.
