‘Exclusion’ row turns spotlight on Kerala’s spending for NH land acquisition

The row over the ‘exclusion’ of Public Works Minister Mohamed Riyas from the inauguration of the National Highway (NH) 66 development projects attended by Prime Minister Narendra Modi in Kochi has once again turned the spotlight on Kerala’s claims with respect to the land acquisition cost borne by it for making this major infrastructure initiative a reality.

Kerala had paid ₹5,580.74 crore as cost of land acquisition for the widening of the NH 66. This sum was also mentioned by Union Road Transport and Highways Minister Nitin Gadkari in the Rajya Sabha in reply to a question on the contribution of States towards NH development.

Further, the Kerala government had on multiple occasions requested the Centre that it be allowed an additional borrowing of ₹6000 crore over the net borrowing ceiling for bearing 25% of the land acquisition cost of the NH development.

In December 2024, Finance Minister K.N. Balagopal, in a meeting with Union Finance Nirmala Sitharaman, had stated that the approved amount for this purpose is ₹6,769 crore and that the State has already spent around ₹5,580 crore. “Cutting this amount from annual borrowing limits amounts to disincentivising the State for supporting large capital projects and runs counter to the policy of the Union government to encourage capital expenditure by the States. This kind of expenditure, perhaps, might not have been done by other States,” Mr. Balagopal had said. The LDF government had repeated its demand more recently as part its wish-list for the Union Budget 2026-27.

The matter had also found mention in Mr. Balagopal’s 2026-27 State Budget speech on January 29. The Budget speech noted that Kerala is the “first government in India to pay ₹ 5,580 crore as 25% of the land acquisition cost of a National Highway.” As such, the National Highway “is a proud symbol of the willpower, the development vision and the administrative excellence of the Pinarayi Vijayan government,” it said.