Union Budget a mixed bag for Tamil Nadu

There were no specific announcements, while broader measures such as the employment incentive scheme are likely to benefit the State

Finance Minister Nirmala Sitharaman arrives to present the Union Budget on July 23, 2024. | Photo Credit: PTI

The Union Budget 2024-25 was a mixed bag for Tamil Nadu with no specific announcements, while broader measures such as the employment incentive scheme are likely to benefit the State.

Ahead of the Budget, Chief Minister M.K. Stalin presented a wish list of projects for Tamil Nadu, including funds for the Chennai Metro Rail Phase 2, and an elevated expressway between Tambaram and Chengalpattu. At a pre-Budget meeting, State Finance Minister Thangam Thennarasu had sought funds for flood relief. None of these found a mention in the Budget speech.

Tamil Nadu’s share of Central taxes is 4.079%, as recommended by the 15th Finance Commission. The amount has been revised upwards from ₹49,754.95 crore to ₹50,873.76 crore in the Union Budget.

The DMK government has pointed out that the State has been getting a much lower share of Central taxes due to the levy of cesses and surcharges. The State government has requested the Union government to merge the cesses and surcharges into the basic rates of taxation, saying the move would ensure that the States receive their legitimate share in devolution.

The announcement of five schemes and initiatives to facilitate employment, skilling and other opportunities and support MSMEs would benefit Tamil Nadu, which is a highly industrialised State and has the highest number of factories.

Tamil Nadu is a top market for education loans, and the announcement of financial support for loans of up to ₹10 lakh for higher education in domestic institutions is likely to benefit the State.

The announcement that the Centre will encourage States that charge a high stamp duty to moderate the rates for all, and also consider lowering the duties for properties purchased by women, if implemented, would benefit homebuyers in Tamil Nadu.

Tamil Nadu is also among the top States in terms of Mudra loans, and the announcement that the limit of the loans will be increased from ₹10 lakh to ₹20 lakh for entrepreneurs who have availed themselves of, and successfully repaid, previous loans under the ‘Tarun’ category would also benefit the State.

The reduced customs duties on gold and silver are also likely to benefit customers in the State.