Kerala will raise issue of fiscal curbs at pre-budget consultation: K.N. Balagopal

Reiterating the Kerala government charge that the Centre was attempting to choke the State financially via unfriendly policies, Finance Minister K.N. Balagopal on Friday said that he would raise the matter at the pre-budget consultation called by Union Finance Minister Nirmala Sitharaman in New Delhi on Saturday.

Addressing a press conference here, Mr. Balagopal said Kerala has suffered a cut of ₹17,000 crore in its borrowing space in the current fiscal. This includes a reduction of over ₹5,900 crore from the eligible borrowing space for the last quarter of 2025-26.The State was eligible to borrow ₹12,000 crore during the January-March period, according to him.

Mr. Balagopal said that he would present the State’s expectations from the upcoming Union Budget as the problems faced by Kerala on account of the financial curbs at the pre-budget consultation Ms. Sitharaman is scheduled to hold with State Finance Ministers on Saturday. Mr. Balagopal’s remarks have also come ahead of the protest planned by the Kerala government on January 12 at the Martyrs’ Column here against Central fiscal policies.

In a memorandum to Ms. Sitharaman in December, Kerala had sought the restoration of amounts that it claims were unfairly slashed. This includes ₹5,944 crore, deducted from its borrowing limit citing off-budget borrowings by special purpose vehicles, ₹965.16 crore cut in April 2025 to make up for a shortfall in IGST balance, and ₹3,323 crore cut in the borrowing limit in connection with the Guarantee Redemption Fund.

Seeks UDF support

Mr. Balagopal called for a united stand against these Central policies that could have serious consequences for the State’s infrastructure development and progress. He urged the Congress-led Opposition United Democratic Front (UDF) to support the State government’s struggle to claim the State’s rightful share of financial resources.

Mr. Balagopal said that the recent reports of the Reserve Bank of India (RBI) and the Comptroller and Auditor General of India (CAG) endorse the State government’s achievements in improving the condition of State finances. The per capita income which stood at ₹1,66,246 in 2016 has increased to ₹3,08,338. The State’s debt-Gross State Domestic Product (GSDP) ratio of 24.88% is lower than the national average of 26.11%, according to him.

The State’s memorandum with respect to its expectations from the Union Budget is expected to cover a range of issues including railway development, assistance for the Vizhinjam port project and rubber subsidy.