Centre creating artificial financial crunch highlights growing state concerns

Centre creating artificial financial pressure on Tamil Nadu has become a major concern, Chief Minister M K Stalin said on Sunday, accusing the Union government of steadily weakening the state’s financial capacity through reduced fund allocations, delayed releases, and policy changes that affect tax revenue.

Addressing a public meeting organised by JACTTO-GEO, the joint forum of government employees’ and teachers’ associations, Stalin said the Centre’s actions have resulted in an avoidable financial strain on the state administration. The event was held to thank the state government for announcing the Tamil Nadu Assured Pension Scheme (TAPS).

The Chief Minister alleged that allocations for centrally sponsored schemes have been cut over the years and that even the reduced funds are not released on time. He added that changes in the Goods and Services Tax framework have further reduced the state’s ability to generate its own revenue, narrowing Tamil Nadu’s financial space.

Stalin said the combined impact of reduced tax devolution, shrinking central assistance, and delayed fund release has placed an additional burden on state finances. Despite these constraints, he asserted that the Tamil Nadu government has continued to meet its commitments to employees through careful planning and administrative management.

He said the state has had to engage with the Union government not only politically but also administratively to ensure that employee welfare measures are protected. According to him, the current situation is not due to financial mismanagement by the state but due to external pressures created by policy decisions at the central level.

Centre creating artificial challenges amid pension reform efforts

The Chief Minister referred to the long-standing demand for restoration of the old pension scheme, stating that it had remained unresolved for over two decades. He recalled that the demand had been pending since it was withdrawn during a previous regime and said the present government approached the issue with empathy and caution.

Stalin explained that instead of making hasty decisions, the government constituted committees, studied financial implications, consulted ministers, and examined future liabilities before announcing TAPS. He said the scheme was designed to balance employee welfare with fiscal responsibility.

He revealed that the state government would have to contribute around ₹13,000 crore initially to the pension fund and approximately ₹11,000 crore annually thereafter. Despite this financial commitment, he assured employees that the government would bear the cost and protect their long-term security.

The Chief Minister said that even under financial pressure created by reduced central support, Tamil Nadu has prioritised its workforce. He urged leaders of JACTTO-GEO to clearly explain the benefits of the new pension scheme to employees and their families so that misinformation does not create confusion.

Stalin also made indirect political remarks, stating that government employees are aware of how they were treated during earlier administrations. He expressed confidence that the current model of governance would continue to support employee rights and welfare.

Centre creating artificial financial strain becomes key issue at government employees’ meet

He said the government’s approach is based on inclusion and long-term stability rather than short-term political decisions. According to him, welfare measures announced for employees were part of a broader development vision that ensures stability for families dependent on government service.

Leaders of JACTTO-GEO, who addressed the gathering, expressed gratitude to the state government for implementing TAPS and other welfare initiatives. They acknowledged the financial challenges faced by the state and said the pension reform reflected a balanced approach.

The meeting also highlighted the importance of cooperation between the government and its employees during periods of financial uncertainty. Speakers noted that sustained dialogue has helped avoid conflict and maintain trust. Also Read: Tribal Dept to Team Up With Global Chess Body to Reshape Learning in Schools in 2026

Stalin concluded his address by stating that the government remains committed to fulfilling the expectations of its employees. He said the administration would continue to stand by them despite fiscal challenges and called for unity in facing future economic pressures.

Conclusion

The Chief Minister’s remarks underline growing tensions between the Centre and states over financial autonomy. As Tamil Nadu balances welfare commitments with shrinking central support, the debate over fund allocation and fiscal fairness is likely to remain central to state politics.