Besides proposing a 2,000-acre modern city near Chennai with IT parks, Fin-Tech zones, R&D centres and residential complexes, Thangam Thennarasu also announced in his Budget speech the setting up of industrial parks in Trichy, Thoothukudi, Cuddalore and Pudukottai. Significantly enough, he also proposed a Semiconductor Mission 2030.
The Minister further announced the establishment of ten new industrial training institutes (ITIs) with ₹152 crore investment, training 1,308 students annually. Further, the establishment of seven ITIs for construction workers’ children, training 1,370 students per year, was also announced.
The Budget gave a boost to Gig workers when the minister announced ₹20,000 subsidy for 2,000 Gig workers to buy electric scooters, group insurance for 1.5 lakh gig workers and new worker lounges in Chennai and Coimbatore.
Highlighting the Semiconductor Mission 2030 with ₹500 crore investment, the Minister said, “Semiconductor parks are being planned in Coimbatore (Sulur & Palladam, 100 acres each).” As part of this mission, a ‘Semiconductor Fabless Lab’ will be set up in Chennai at an estimated cost of Rs 100 crore in collaboration with leading industry and academic institutions. The initiative aims to attract world-class semiconductor design companies and domestic start-ups to establish their design centres in Tamil Nadu. To drive industrial transformation in Coimbatore, semiconductor manufacturing parks will be established in Sulur and near Palladam, each spanning 100 acres. These parks will be developed in collaboration with companies from the United States, Singapore, Malaysia and Taiwan, boosting the region’s economic growth.
Additionally, a ‘Hosur Knowledge Corridor’ will be developed with world-class infrastructure to support Global Capability Centres (GCCs) and R&D hubs of leading IT firms, similar to Chennai’s Old Mamallapuram Road (OMR) IT corridor.
Thennarasu announced plans to boost industrial development across Tamil Nadu. Two new footwear parks will be set up — one in Melur, Madurai district, and another in Cuddalore — each generating 10,000 jobs with a total investment of Rs. 250 crore. Additionally, SIPCOT will establish a dedicated footwear skill training facility in Kallakurichi.
The Budget proposed the establishment of a dedicated industrial park for the engineering and fabrication industry in Trichy district, covering 250 acres and creating 5,000 jobs in the central region. In Thoothukudi, a Man-Made Fibers (MMF) and Technical Textiles Industrial Park will be established, complementing the district’s existing green hydrogen and automobile investments. New industrial parks will also be developed in Cuddalore (500 acres) and Pudukottai (200 acres).
To further strengthen these sectors, TIDCO will establish a Centre of Excellence for advanced pump motor manufacturing and a Centre of Excellence for foundry in Coimbatore, in collaboration with private industry and associations. Additionally, a new TIDEL Park will be set up in Hosur at a cost of Rs 400 crore to expand IT infrastructure.
Reduced fiscal deficit
The Budget pegged the state’s real GSDP growth for FY25 at 9 per cent and nominal GSDP growth at 14.5 per cent for FY25. The fiscal deficit in the revised estimates of FY25 decreased by ₹6,992 crore to reach ₹1,01,698 crore (3.26 per cent of GDP) as against ₹1,08,690 crore budgeted for FY25 (3.44 per cent). The fiscal deficit for FY26 is estimated to be ₹1,06,963 crore (around 3 per cent of GDP). The state has ambitious capex plans for FY26 and has budgeted to grow its capex at 22 per cent for FY26 at ₹57,230.96 crore. This is despite the state marginally falling short of its FY25 budgeted estimates. The revised estimate for capex for FY25 is ₹46,766.03 crore as against the originally budgeted level of ₹47,681 crore. The revenue deficit in revised estimates is estimated to decrease to ₹46,467 crore compared to ₹49,279 crore earlier budgeted for FY25 on account of prudent fiscal management. The revenue deficit for FY26 is estimated to further reduce to ₹41,635 crore at 1.17 per cent of the GDP.
The state expects to grow its Own Tax Revenue (SOTR) at 14.6 per cent in FY26 from its revised estimates for FY25 which is at ₹1,92,752.43 crore in the revised estimates for FY25.
The outstanding debt to GSDP ratio in the revised estimates of FY25 is estimated to marginally increase to 26.43 per cent as compared to 26.41 per cent predicted earlier in budget estimates for FY25. This ratio is expected to decrease to 26.07 per cent of the GSDP in FY26.
The Budget also restored with effect from April 1, 2026 the Earned Leave Surrender System for state government employees and teachers, which was suspended during Covid. This move will likely benefit over 9 lakh such employees.
Further, in a push to women empowerment, the registration fee for all immovable assets, including houses, plots and agricultural land, valued up to ₹10 lakh will be reduced by one per cent when registered in the name of women, from April 1, 2025. About 20 lakh college students are also set to be provided with a tablet or laptop, based on their preference, over the next two years.
