The Tamil Nadu government today said it might consider reducing taxes on petrol and diesel.
However, Tamil Nadu chief minister K Palaniswami highlighted the requirement of funds for various welfare measures.
"In Tamil Nadu, as far as the Amma (late Jayalalithaa) government is concerned, funds are required for various departments," he said, after meeting Prime Minister Narendra Modi to seek Central assistance for various initiatives in the state.
"While the state has recently okayed the implementation of seventh Pay Commission recommendation for its employees, arrears for Transport department staff are also being disbursed," Mr Palaniswami added.
"After creating the fund source, government will consider the plea (to reduce taxes on fuel)," he said.
The Centre last week announced a Rs 2.50 a litre cut in petrol and diesel prices, factoring in excise duty reduction of Rs 1.50 per litre and asking oil companies to absorb another Re 1.
Many BJP-ruled states followed sit and announced tax cuts.