Lok Sabha Question No. 2685 (UNSTARRED), answered on 2026-03-09
Subject: Pending Central Funds/Grants to Tamil Nadu
Ministry: FINANCE
Asked by: Shri K E Prakash

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF EXPENDITURE

## LOK SABHA UNSTARRED QUESTION No. 2685

TO BE ANSWERED ON MONDAY, MARCH 09, 2026/PHALGUNA 18, 1947 (Saka)

## Pending Central Funds/Grants to Tamil Nadu

## 2685.   Shri K E Prakash:

Will the Minister of FINANCE be pleased to state:

- a) The  whether  the  attention  of  the  Government  has  been  drawn  to  the  statement  of  Finance Minister of Tamil Nadu, that the State's fiscal pressure has intensified due to Union funds being 'withheld, reduced or unilaterally deducted', if so, the reaction of the Government thereto;
- b) whether the Government has withheld or delayed release of funds under Samagra Shiksha, reduced allocation under Jal Jeevan Mission, kept pending certain Finance Commission grants, deducted Rs. 1,709 crore towards IGST without consultation and mandated the transfer of 5 per cent of outstanding guarantees to the Guarantee Redemption Fund, if so, the details thereof; and
- c) the steps taken by the Government to address the concerns raised by the State Government of Tamil Nadu and to ensure that the fiscal space, borrowing limits and welfare expenditure of States are not adversely affected?

## ANSWER

## THE MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (c): The central government provides funds to state governments under the heads -Devolution of  central  taxes  and  duties,  Grants  recommended  by  the  central  Finance  Commission,  Centrally Sponsored Schemes (CSS), and Loan & Advances. Details of funds provided to Tamil Nadu under these heads in the current financial year till 05.03.2026 are as under:

| Head                          | Funds released in 2025-2026 (Till 05.03.2026) (in Rs Crores)   |
|-------------------------------|----------------------------------------------------------------|
| Tax devolution                | 51,655.19                                                      |
| Centrally Sponsored Scheme    | 15,474.98                                                      |
| Finance Commission Grants     | 5,466.90                                                       |
| Other Grants/Loans /Transfers | 16,572.02                                                      |
| Total:                        | 89,169.09                                                      |

Under Samagra Shiksha, the central government has released an amount an amount of Rs 538.39 crores to Tamil Nadu in 2025-26 (till 05.03.2026). Release of funds under the scheme is based on scheme guidelines, submission of the utilization certificates, audit reports of funds released earlier, physical and financial progress reports, contribution of state share, and compliance with other scheme norms.

Under Jal Jeevan Mission (JJM), the central government has released an amount of Rs. 5899.54 crores to Tamil Nadu from 2019-20 to 2024-25. As the scheme period is over and the outlay approved under the  scheme was released to the states/UTs, no further amount has been released to any State/UT including Tamil Nadu in 2025-26.

The issue of recovery of shortfall in IGST was deliberated in the 55th Meeting of the GST Council and it was decided that cumulative recoveries for FY 2023-24 and FY 2024-25 shall be made in March,  2025  in  the  base  year  ratio.  Subsequently,  various  States  had  raised  concerns  that  such recoveries made in the month of March, 2025 should not be carried out at the end of the FY as it may adversely impact the fiscal situation of the States. The issue was placed before GST Implementation Committee (GIC), which comprises of representatives of central and state governments, of which Tamil Nadu is also a member. The committee in its meeting held on 27.03.2025, decided that the request of the States regarding deferring the recovery of IGST deficit may be considered and the consolidated recovery for FY 2023-24 & FY 2024-25 shall be carried out in April, 2025. Accordingly, the said recovery was made in the month of April, 2025 for all states, in accordance with the approvals of the GST Council and GIC.

The Reserve Bank of India (RBI) manages a Guarantee Redemption Fund (GRF) constituted from contributions  made  by  state  governments  for  meeting  their  obligations  arising  on  invocation  of guarantees issued by them. A working group formed by the RBI on State Government Guarantees had recommended that States should continue with their contributions towards building up the GRF to a desirable level of five per cent of their total outstanding guarantees. Accordingly, it was decided that for all states, any shortfa ll in the State Government's contribution to the GRF as on 1st April 2025 will be accounted in the Gross Borrowing Ceiling (GBC) of the state government, subject to cap of 0.25% of the State's estimated GSDP for 2025-26.

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