Tamil Nadu’s Finance Minister Thangam Thennarasu warned in the state assembly that the recent GST rationalisation proposals could cost the state ₹13,000 to ₹15,000 crore per year. He urged the Union government to consider a compensation cess to mitigate the shortfall and argued that if pending central dues were released, Tamil Nadu’s debt burden could be reduced by ₹3 lakh crore. Thennarasu also contrasted the DMK government’s debt rise (93%) with the previous AIADMK regime’s 128% increase, noting that despite high debt levels (₹9.21 lakh crore), the state has managed interest payments of ~₹1.4 lakh crore annually. During a debate prompted by former AIADMK minister P. Thangamani, he questioned why AIADMK (as a BJP ally) had not secured more central grants for Tamil Nadu.
Chief Minister M.K. Stalin defended the DMK’s parliamentary efforts, while BJP MLA Vanathi Srinivasan countered that the GST changes affect Union revenues too and highlighted recent project allocations to the state. The issue underscores growing tension between states and the Centre over fiscal autonomy, vertical devolution, and revenue sharing.Observers will watch whether the Union government proposes compensatory measures or adjusts the rationalisation plan in response.If no relief comes, Tamil Nadu’s fiscal space for development spending may shrink, potentially slowing infrastructure, welfare, and social services.