Kerala Governor Slams Centre's Fiscal Cuts, Warns of Severe Financial Stress
Image Source: Internet
Thiruvananthapuram: Kerala's budget session kicked off on Tuesday with Governor Rajendra Vishwanath Arlekar presenting the Left government's policy address, which sharply criticizes the central government for imposing severe fiscal stress on the state. The policy address highlights the Centre's curtailing of Kerala's finances, including a ₹12,000 crore cut in the final quarter of the 2025-26 financial year without justification. The state is also owed ₹5,650.45 crore under central schemes, which have been pending since September 2025. The governor pointed out that the state faces additional challenges, including a decline in central contribution to the new rural employment act, a revenue loss of over ₹8,000 crore due to GST rationalization, and the impact of US tariff measures on export-oriented sectors. Moreover, restrictions on Kerala's borrowing limits and adjustments to the Integrated Goods and Services Tax have resulted in a loss of ₹17,000 crore, while the Gross State Domestic Product methodology has led to a further loss of ₹4,250 crore. The fiscal constraints, the governor said, affect all sections of society by putting pressure on expenditure in health, education, welfare programs, agriculture, and employment. The Kerala government has rejected claims that its financial stress is due to extravagance, instead attributing it to the Centre's actions. The state has strengthened its fiscal position by increasing its own revenue and rationalizing expenditure. Despite the 'cumulative constraints' imposed by the Centre, Kerala has continued to invest in welfare measures, infrastructure development, industrial promotion, and employment generation. The state's economy has grown at an average of 12 per cent annually, more than doubling its economic output in the last decade. The governor also outlined the government's achievements in agriculture, health, education, and infrastructure development, as well as initiatives to further strengthen these sectors.
