Tamil Nadu is being betrayed in Tax sharing: Thangam Thennarasu

Finance Minister Thangam Thennarasu accused the union government of betraying TN on many counts including the devolution of tax revenue.

Replying to the discussion on the first supplementary estimates for the current financial year in the Assembly, the minister said the state continues to be one of the largest contributors to the country’s direct tax revenues.

“But in devolution of share of tax revenue, TN is not getting its due share. “When we pay Rs 1 to GOI, the union government devolves only 29 paise. But Uttar Pradesh, where BJP is in power, gets Rs 2.73 in return for a contribution of Rs 1. Between 2014-15 to 2021-2022, TN contributed Rs 5.16 lakh crore to the country’s direct tax revenues, but in return, the state received only Rs 2.08 lakh crore,” he said.

Contrary to this, UP contributed only Rs 2.24 lakh crore but the union government devolved Rs 9.04 lakh crore to that state -i.e., UP got a nearly four-fold hike in the devolution of tax shares. The minister also said during the past 15 years, due to the Central Finance Commission recommendations, TN has been facing huge financial losses.

The allocation which stood at 5.305% in the 12th Finance Commission has come down to 4.079% in the 15th Finance Commission.