Kerala Finance Minister K.N. Balagopal, while presenting the Kerala Budget 2026–27, alleged that beyond manipulating votes, the central government is effectively “stealing” state funds. He criticized the Centre for disregarding Kerala despite the Comptroller and Auditor General’s (CAG) praise of the state’s financial management.
Balagopal highlighted that at the very end of the financial year—traditionally the period of highest expenditure—the Centre cut ₹5,944 crore from Kerala’s approved borrowing limit, describing it as a “double blow” to the state. He stated that his budget speech was a way to formally protest this severe financial neglect on behalf of the people of Kerala.
The minister accused the central government of treating states like satellites or waiting for “crumbs” rather than respecting their financial autonomy. He noted that even a personal appeal to the Union Finance Minister in Delhi had no impact. According to him, such actions undermine India’s federal system.
In the Kerala Budget 2026–27, the state aims to focus on social welfare, infrastructure development, and education, but the Centre’s cuts pose a major challenge to achieving these priorities. Currently, only 25% of Kerala’s total revenue comes from the Centre, while the state generates the remaining 75% independently. By contrast, other states receive over 50% of their revenue from central allocations on average. The minister emphasized that this stark imbalance reflects the Centre’s neglect of Kerala.
This year alone, Kerala has lost ₹17,000 crore of its expected revenue. With upcoming GST rate revisions, an additional loss of around ₹8,000 crore per year is possible. Balagopal warned that the central government’s encroachment on states’ financial rights could become one of the biggest challenges India faces in the future.
