Budget 2024: Did FM Nirmala Sitharaman meet demands of southern states?

Finance Minister Nirmala Sitharaman presented the Union Budget on Tuesday with a focus on driving domestic growth through jobs, training, and small businesses. The first post-poll Budget for Modi 3.0 also saw the FM unveil major sops for NDA-ruled Bihar and Andhra Pradesh, even though the two states were denied ‘special status’.

Nirmala Sitharaman, in her Budget speech, has not announced anything pertaining directly to Tamil Nadu, Kerala, or Karnataka. However, the government has covered some demands put forth by the states under overarching pan-India announcements.

Politicians from Karnataka and Kerala had earlier led protests in Delhi to demand their ‘tax dues’.

What had Tamil Nadu sought?

Chief Minister MK Stalin sought funds for several developmental projects ahead of the Budget announcement on Tuesday. He also wrote to Prime Minister Narendra Modi in February, calling for expedited approval of the second phase of the Chennai Metro Rail project.

“The people of Tamil Nadu are expecting the release of three years of pending funds for the Chennai Metro Rail, approval for the express flyover between Tambaram and Chengalpattu, a reduction in income tax, which has been a long-standing expectation of the middle class for the past 10 years, approval for the Coimbatore and Madurai metro rail projects, allocation of funds for pending projects under old and new railway schemes in Tamil Nadu, and an increase in the slab rate for houses being constructed under rural and urban housing development schemes,” he wrote.

Were the demands met?
The metro rail and road projects flagged by Stalin were not mentioned in the Budget announcements made by Finance Minister Nirmala Sitharaman.
The Modi government, however, announced plans to build ‘three crore additional houses under the PM Awas Yojana in rural and urban areas’ of the country. FM Sitharaman said that the necessary allocations were being made without going into additional detail.
Taxpayers are also set to get some relief as the Modi government hiked the slabs for personal income tax. Those earning up to ₹3 lakh will not have to pay tax in the new tax regime, while those earning between ₹3 lakh and ₹7 lakh will pay 5% tax.

What had Kerala sought?

Members of all leading parties in the southern state came together last week to demand a special economic package of ₹24,000 crore from the Centre. The request — to tide over the current liquidity stress — was also shared by finance minister KN Balagopal during a pre-budget discussion with Sitharaman last month. A statement issued by Balagopal ahead of the Budget presentation also sought a special package of ₹5,000 crore for continued work on the Vizhinjam International Port project.

According to a Mathrubhumi report, Kerala had also requested the release of the Union Government's share of ₹3,686 crore spent on centrally sponsored schemes. The statement also stressed the need to periodically revise the honorarium for various scheme workers and highlighted how Kerala had been ‘burdened’ by the Centre's decision to slash funds and cap borrowing limits. It also sought an increase in its share in Centrally-sponsored schemes from 60% to 75% and urged the Modi government to expedite permissions for the SilverLine rail project. A hike in the support price of rubber to ₹250 per kg and the establishment of an All India Institute of Medical Sciences (AIIMS) and Kannur International Ayurveda Research Institute were the other major demands.

Were the demands met?
Kerala was not directly mentioned in the budget, with Opposition MPs from the state dubbing it an ‘exercise in political survival’. Allocation details for employment schemes and other government initiatives were not announced on Tuesday, but these schemes may cover some of Kerala's demands.

What had Karnataka sought?

The Siddaramaiah-led government had previously asserted that the Centre had failed to give it ₹5,495 crore recommended as special grants by the Finance Commission in its interim recommendation. The remarks spurred a war of words, with Finance Minister Nirmala Sitharaman dubbing it a ‘false and misleading’ claim.

"Karnataka is contributing more than ₹4.30 lakh crores as tax. Karnataka gives ₹100 (in terms of revenue) to the Centre, but gets back only ₹13. Karnataka has lost ₹62,098 crore in devolution of taxes in 2025-26 because of the (shift from) 14th Finance Commission to 15th Finance Commission. That is why we are agitating,” CM Siddaramaiah said as party MLAs and MPs led a protest in February.

Were the demands met?
Karnataka was not mentioned in Budget 2024. “To protect the NDA government from toppling, they have only taken care of Bihar and Andhra Pradesh. They did not bother about the other states, especially those states where the INDIA bloc is in power. This is evident discrimination,” said Karnataka Deputy CM DK Shivakumar.