Given Tamil Nadu’s strong educational ecosystem, the government may introduce programmes aimed at equipping students with the necessary skills to meet industry demands.
Published Mar 08, 2025 | 5:22 PM ⚊ Updated Mar 08, 2025 | 5:22 PM
Finance Minister Thangam Thenarasu will present the DMK government's last full Budget before the Assembly elections on 14 March.
Synopsis: The impact of natural disasters, rapid urbanisation, and the increasing elderly population are likely the focus areas of the Budget that will also chart the state’s roadmap for the next decade.
The Budget Tamil Nadu’s Finance Minister Thangam Thenarasu is set to table in the Assembly on 14 March is likely prioritise three major issues the state has been facing.
During his interaction with the 16th Finance Commission in November last, Chief Minister MK Stalin highlighted three major challenges: the impact of natural disasters, rapid urbanisation, and the increasing elderly population.
He pointed out that natural disasters have severely affected the state, causing loss of lives, damage to infrastructure, and disruptions in livelihoods.
The financial burden of disaster relief and restoration has eaten into the funds available for development and welfare initiatives. He urged the Finance Commission to ensure that adequate funds are allocated to states like Tamil Nadu to manage disaster recovery effectively.
Stalin also drew attention to the state’s aging population. Tamil Nadu’s average age currently stands at 36.4 years, significantly higher than that of states like Uttar Pradesh. By the time the 16th Finance Commission completes its tenure, this is expected to rise to 38.5 years, making Tamil Nadu the state with the highest elderly population in the country.
This demographic shift reduces the benefits the state has historically received based on population figures while simultaneously increasing the demand for social welfare measures for the elderly. According to sources close to the Finance Ministry, this aging demographic presents unique economic challenges, requiring tailored fiscal strategies in the upcoming Budget.
Rapid urbanisation presents another significant challenge, particularly in terms of infrastructure and resource allocation. With limited land and water resources, as well as an increasing population, urban local bodies require substantial funding to ensure sustainable growth. Stalin specifically requested the Finance Commission to recommend increased allocations for cities such as Chennai to enhance basic amenities and support urban expansion.
He also pointed out the obstacles the state has been facing in generating revenue since the implementation of the GST regime, underscoring the critical role of the Finance Commission in ensuring fair devolution of funds.
The upcoming budget is expected to align closely with these priorities, with Thenarasu likely to introduce measures addressing these challenges. Tamil Nadu has been witnessing rapid urbanisation, and the government has consistently worked towards decentralising growth beyond Chennai.
In the previous Budget, Thenarasu announced the establishment of TIDEL parks in Madurai and Trichy, alongside Neo TIDEL parks in Thanjavur, Salem, Vellore, Tiruppur, and Thoothukudi.
He also announced industrial complexes, textile parks, and several other infrastructure initiatives across Tamil Nadu. This strategy aimed to spread development across the state rather than over-relying on Chennai.
Building on this initiative, the 2025-26 Budget is expected to allocate more funds for infrastructure development, ensuring that urban expansion aligns with the needs of different regions. This move will also create employment opportunities and enhance Tamil Nadu’s overall economic competitiveness.
A key element anticipated in the upcoming Budget is student-centric initiatives.
Infrastructure development alone is insufficient without a skilled workforce. Given Tamil Nadu’s strong educational ecosystem, the government may introduce programmes aimed at equipping students with the necessary skills to meet industry demands.
This is particularly critical as the state prepares to tackle future workforce challenges.
One of the most pressing concerns for Tamil Nadu is its aging population. Stalin has already flagged this issue as a major challenge, pointing out that the state’s average age is significantly higher compared to northern states like Uttar Pradesh. By 2035, Tamil Nadu could have one of the highest elderly populations in India, leading to potential workforce shortages.
To address this issue, the government may introduce special initiatives focusing on workforce diversification, retraining programmes, and policies to ensure sustained economic productivity. Additionally, increased investments in healthcare, social welfare schemes, and pension benefits for senior citizens are likely to be major budgetary components.
Tamil Nadu is one of India’s highest-earning states, ranking second in GDP. The next decade will be crucial for maintaining its economic momentum.
The Budget is expected to lay the groundwork for policies that will not only address immediate concerns but also ensure long-term growth. With a strong emphasis on workforce planning, infrastructure expansion, and urban development, Tamil Nadu aims to remain at the forefront of India’s economic progress.
As the state moves forward, this Budget will serve as a roadmap for tackling its demographic and economic challenges while solidifying its position as a leading industrial and welfare-driven state.
Like the Union government, the Stalin-led dispensation will also release the Economic Survey along with the Budget presentation. This will be the DMK’s last full Budget before the Assembly elections in 2026.
(Edited by Majnu Babu).
