Budget leaves TN feeling snubbed ahead of polls; 'no projects', says Kanimozhi

As Finance Minister Nirmala Sitharaman presented Union Budget 2026-27 in Parliament today (February 1), sharp criticism erupted from Tamil Nadu’s political circles, with Opposition leaders accusing the Centre of deliberately sidelining the state just weeks before the crucial Assembly elections.

Also read: Budget 2026-27 LIVE: Kerala, Karnataka and West Bengal cry foul over allocations

In a strong reaction to the Union Budget 2026-27, DMK MP Kanimozhi Karunanidhi told The Federal that the Budget completely ignored Tamil Nadu. “There are no projects for Tamil Nadu in the budget, nor has any fund been allocated. Why was even Thirukkural not mentioned in this year’s budget speech? This is a budget that exploits Tamil Nadu’s natural resources and a budget that says nothing about farmers,” she said.

'Disappointment without change'

She summed up the widespread disappointment, stating, “Even elections couldn’t persuade the Union BJP government to remember Tamil Nadu in this budget. Disappointment without change.”

Tamil Nadu Finance Minister Thangam Thennarasu told The Federal that the Union Budget 2026-27 was a profound disappointment for the people of Tamil Nadu. “The budget offers no clear announcements for the state’s basic development needs like employment, education, healthcare, or industrial investment. The legitimate demands that Tamil people have been raising for years have once again been ignored. Tamil Nadu, which contributes significantly to India’s growth, has not been given its due share. This is a budget that completely disregards the expectations of the Tamil people. Those who were hoping for change have received nothing but disappointment,” he said.

Also read: Pre-poll storm in TN over Rs 2,000-cr advance sanction for roads works

Chief Minister MK Stalin, in a pointed social media post, listed unmet demands, including ₹3,548 crore in pending education funds, ₹3,112 crore for the Jal Jeevan Mission, the Coimbatore and Madurai metro rail projects, and a 50% share of central tax revenue, as recommended by the Finance Commission.

"நாங்கள் கேட்பது சலுகை அல்ல, எங்கள் உரிமைக்குரல்!"

ஒவ்வொரு ஆண்டும் பல்லாயிரம் கோடி ரூபாயை வரியாகக் கட்டும் தமிழ்நாட்டிற்கு, இந்த பட்ஜெட்டில் கிடைத்தது வெறும் 'சுழியம்தான்'. கோவை, மதுரை மெட்ரோ முதல் மாணவர் கல்வி நிதி வரை அனைத்தையும் புறக்கணிப்பது தமிழ்நாட்டு மக்களை அவமதிக்கும்… pic.twitter.com/Arc7pPSXyn

— DMK IT WING (@DMKITwing) February 1, 2026

“Will Tamil Nadu at least get announcements keeping the elections in mind?” he asked, adding that projects like Madurai AIIMS should move beyond mere announcements to timely execution with proper funding.

There are no projects for Tamil Nadu in the budget, nor has any fund been allocated. Why was even Thirukkural not mentioned in this year’s budget speech?

BJP Tamil Nadu president Tamilisai Soundararajan hits back at Stalin, calling his remarks “narrow-minded politics” and accusing him of insulting Thirukkural by linking it to electoral expectations. “Prime Minister Modi has delivered continuous development to Tamil Nadu for 11 years without thinking of elections. The people will not forgive this petty mindset,” she told The Federal.

Rare Earth corridors

The only significant Tamil Nadu-specific highlight in the budget was the announcement of Dedicated Rare Earth Corridors linking Tamil Nadu, Andhra Pradesh, Odisha, and Kerala. Building on a scheme for Rare Earth Permanent Magnets launched in November 2025, the Finance Minister said these corridors would promote mining, processing, research, and manufacturing of critical minerals found in abundance along coastal beach sands.

Also read: Budget 2026-27 gives big push to rare earths; these 4 states to get dedicated corridors

“This will position India as a global hub for rare earth production and reduce dependence on imports, particularly from China,” Sitharaman noted, adding that the corridors would boost self-reliance (Atmanirbhar Bharat) and create an estimated 50,000 new jobs. Private investment will be encouraged, and a dedicated Rare Earth Critical Minerals Mission will receive funding.

Reactions on rare earth corridor

Industry experts welcomed the move, especially given Tamil Nadu’s growing electric vehicle (EV) manufacturing base. Rare earth magnets are essential for permanent magnet motors used in EVs, defence equipment, wind turbines, and high-temperature-resistant batteries. “With Tamil Nadu already a leader in EV production, this corridor could significantly scale up local manufacturing and attract more investment,” an automotive sector insider told The Federal.

Also read: India’s race for Rare Earths: PLI, mining push, and a long road to tech independence

However, Senior Advocate V Suresh, who has served as amicus curiae in several Madras High Court PILs exposing illegal beach sand mining, cautioned that rare earth resources described as a “valuable gift of nature” must remain under public control. “Processing, value addition, and export should be handled by state or central public sector enterprises, not handed over to private companies for exploitation,” he told The Federal.

Fisheries sector

On fisheries, the budget proposed duty-free status for fish caught by Indian vessels in the Exclusive Economic Zone (EEZ) or high seas, with landing in foreign ports treated as exports. Safeguards against misuse were promised. Yet, NJ Bose, president of the Rameshwaram Fishermen’s Association, dismissed it as benefiting large corporations rather than traditional fishermen. “There is no international high seas between India and Sri Lanka. This will not stop arrests or attacks by the Sri Lankan Navy,” he said.

MSME sector

For Tamil Nadu’s vital MSME sector, ₹1,000 crore was allocated to revive 2,000 industrial clusters and support micro, small, and medium enterprises.

Processing, value addition, and export should be handled by state or central public sector enterprises, not handed over to private companies for exploitation

Economist Kalaiyarasan Arumugam called the allocation “welcome but conservative,” pointing out the absence of any special package for Tamil Nadu, unlike the targeted funds given to Bihar and Andhra Pradesh in the 2024 budget. He said, “Given the Trump tariff, changing world economic order, global uncertainty, the allocation seems not to bein sync, even though it falls short of what is recommended in an economic survey that appeared the day before yesterday. No populist schemes for any states, including TN which is going for election this year."

Rail project announcements

The budget also announced seven new high-speed rail corridors as “growth connectors,” including Hyderabad-Chennai and Chennai-Bengaluru routes, a move that could improve connectivity for Tamil Nadu’s southern cities. However, the omission of any Kerala corridor drew protests in Parliament.

Also read: Budget 2026-27 unveils high-speed rail, freight corridors push

AVS Marimuthu, Co-Convener of the Tamil Nadu Rail Passengers Association, told The Federal that high-speed rail projects like Vande Bharat are welcome and that today’s announcements would help passengers reach other metro cities. “However, no new projects have been announced that would make travel more convenient for passengers within Tamil Nadu. We expected a direct Madurai–Thoothukudi line via Aruppukottai, daily trains to Tiruchendur, and new services via Trichy, but none of these were announced,” he said.