Introduction
In a bold statement ahead of the upcoming Union Budget, Kerala Finance Minister K. N. Balagopal highlighted the state’s significant increase in expenditure over the past few years, despite facing considerable financial constraints imposed by the central government. Balagopal emphasized that Kerala’s budgetary outlay has surged by 30-35% under the leadership of Chief Minister Pinarayi Vijayan, reflecting a robust commitment to development and welfare.
Financial Growth Amidst Restrictions
Balagopal reported that Kerala’s average annual expenditure under the first Pinarayi Vijayan administration was approximately ₹1.20 lakh crore. Under the second term of the Vijayan government, this expenditure rose to ₹1.60 lakh crore, showcasing a substantial increase despite severe financial restrictions from the Centre. These restrictions included reduced borrowing limits, which the state navigated by prioritizing critical expenditures.
The Finance Minister underscored that this financial growth was achieved in spite of the central government’s attempts to “financially choke” the state. The increase in expenditure allowed for significant developments and welfare measures, including the implementation of a pay revision—a move he claims would not have occurred under the previous United Democratic Front (UDF) government.
Investment and Social Welfare Initiatives
The Kerala Infrastructure Investment Fund Board (KIIFB) played a pivotal role in this financial expansion, investing approximately ₹30,000 crore in development projects since 2016. Of this, about ₹20,000 crore was allocated during the second term of the Left Democratic Front (LDF) government. Additionally, around ₹27,000 crore was spent on social welfare pensions over the past three years, with minimal arrears remaining.
Despite these advancements, the state had to cover more expenses out of its own resources for initiatives typically funded by the Centre, including the National Health Mission (NHM), Anganwadis, and ASHA. Balagopal pointed out that the Centre has yet to reimburse over ₹3,000 crore spent by the state on these initiatives.
Future Financial Planning and Requests
Looking ahead, Balagopal indicated that while the state plans to restructure its priorities due to ongoing financial constraints, there will not be significant cuts in essential spending. The focus will remain on addressing public needs, generating employment, and continuing necessary developmental works.
During a pre-budget meeting in June, Kerala requested a special package of ₹24,000 crore from the Centre for the Union Budget 2024-25. This amount corresponds to the reductions made in the state’s borrowing limits in the fiscal years 2022-23 and 2023-24. The Finance Minister also highlighted the need for a special capital investment of ₹5,000 crore to support the development of the Vizhinjam port and its surrounding region.
Furthermore, Balagopal reiterated Kerala’s long-standing demand for the establishment of an All India Institute of Medical Sciences (AIIMS) within the state, a crucial step for enhancing healthcare infrastructure.
Summary
Kerala’s Finance Minister K. N. Balagopal has showcased the state’s impressive increase in expenditure amid significant financial restrictions from the central government. With a growth in annual spending from ₹1.20 lakh crore to ₹1.60 lakh crore, Kerala has managed to sustain and enhance development and welfare initiatives. The state is actively seeking additional support from the Centre, including a special budgetary package and capital investment for critical projects.
Table of Key Learning Points
| Point | Details |
|---|---|
| Expenditure Increase | Kerala’s average annual expenditure grew from ₹1.20 lakh crore to ₹1.60 lakh crore. |
| Financial Restrictions | State faced reduced borrowing limits and financial constraints imposed by the Centre. |
| KIIFB Investment | ₹30,000 crore invested by KIIFB, with ₹20,000 crore during the second LDF government term. |
| Social Welfare Spending | ₹27,000 crore spent on social welfare pensions in three years. |
| Central Reimbursements | State covered over ₹3,000 crore in costs for central initiatives, awaiting reimbursement. |
| Future Financial Requests | Kerala requested ₹24,000 crore and ₹5,000 crore for Vizhinjam port development. |
Soumya Smruti Sahoo is a seasoned journalist with extensive experience in both international and Indian news writing. With a sharp analytical mind and a dedication to uncovering the truth, Soumya has built a reputation for delivering in-depth, well-researched articles that provide readers with a clear understanding of complex global and domestic issues. Her work reflects a deep commitment to journalistic integrity, making her a trusted source for accurate and insightful news coverage.
