Tamil Nadu interim budget allocates Rs 18,091 crore for energy sector
Author: PPD Team Date: February 27, 2026
The Tamil Nadu government has presented the interim budget 2026-2027, seeking a total net expenditure of Rs 18,090.63 crore for the Energy Department.
Under major head 2801 (Power), the state has estimated net expenditure of Rs 24,661.23 crore for 2026-27, compared with the revised estimate of Rs 15,284.68 crore for 2025-26. The allocation includes support to the electricity board and subsidies for multiple consumer categories.
Major head 4801 (Capital Outlay on Power Projects) reflects net expenditure of Rs 5,067.80 crore, with planned investments focused on transmission and distribution infrastructure.
The budget provides Rs 7,641.34 crore for tariff reduction subsidies to domestic consumers, continuing reduced electricity tariffs introduced in June 2004. A further Rs 20.60 crore has been allocated to support subsidized tariff rates for public places of worship.
Loss funding to Tamil Nadu Power Distribution Corporation Limited (TNPDCL) is estimated at Rs 16,291.00 crore in the revised estimates, although variations are noted across budget documents.
Tamil Nadu Energy Development Agency (TEDA) receives allocations under multiple heads, including Rs 3 lakh under major head 2810 (New and Renewable Energy) and Rs 9.88 lakh under major head 3425 (Other Scientific Research). The funding supports solar-powered electric vehicle charging infrastructure, grid-connected solar projects, and the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) scheme for solar generation by farmers.
The budget includes Rs 42.80 crore for externally aided projects covering rehabilitation and improvement of power infrastructure under Phase II and Phase III programmes.
Under the loan segment, Rs 348.25 crore has been provided for power projects under major head 6801, including Asian Development Bank (ADB) loan assistance to Tamil Nadu Transmission Corporation Limited (TANTRANSCO) for the Chennai-Kanyakumari Industrial Corridor Project. The capital outlay also includes Rs 5,000 crore as share capital support to the Tamil Nadu Electricity Board.
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