'There is conspiracy against Kerala...' Pinarayi government blames Modi administration for financial crisis

Kerala Budget 2024: The document reveals disparities in fund allocation from the Centre, leading to a significant financial shortfall. It also alleges a conspiracy to dismantle Kerala's development model, emphasizing the need for justice and fair allocation

Kerala Finance Minister KN Balagopal on Monday lashed out at the Narendra Modi government at the Centre for the massive financial crisis that the state is reeling under. The Kerala Budget 2024 document mentions in detail what the Left government calls a 'conspiracy' against the state. Concerns were raised over the financial crisis the state is facing despite a notable increase in its own tax collection. The budget document highlighted disparities in the allocation of funds from the Centre, leading to a significant shortfall in Kerala's financial resources.

The document pointed out that while, on average, the Centre provides Rs 35 for every Rs 65 collected by states, Kerala receives only Rs 21 for every Rs 79 of its own tax collection. Drawing attention to comparable states, it was noted that Uttar Pradesh gets Rs 46 and Bihar receives Rs 70 from the Centre for every Rs 100 collected.

The divisive pool of tax collected by the Centre, intended for distribution among the states, has seen a decline in Kerala's share over the years. From 3.87% during the 10th Finance Commission, it has decreased to 2.5% in the 14th Finance Commission and further down to 1.925% in the 15th Finance Commission. The budget document emphasized the significant financial loss Kerala has suffered as a result.

The state's borrowing entitlement, as per the Centre's criteria, has also been a cause for concern. Kerala's eligible borrowing limit, calculated at ₹39,626 crore, has been curtailed, and the state has been permitted to borrow only Rs 28,830 crore. This reduction in the borrowing limit was executed mid-fiscal without prior notice, based on an alleged improper calculation of the public account balance.

The budget document detailed a series of curtailments by the Centre, amounting to a staggering Rs 57,400 crore, affecting various aspects such as GST compensation, Revenue Deficit Grant, and changes in the calculation of public debt. The reductions, coupled with a decline in the state's divisible pool share, are seen as a concerted effort to undermine the Kerala development model.

The document raised concerns about a perceived conspiracy to dismantle the Kerala development model, which focuses on the concept of a welfare state. It alleged that this effort aims to obstruct the manifold benefits and welfare activities provided by the state to farmers, workers, and other citizens, potentially creating discontent among beneficiaries. The budget highlighted the need for justice and fair allocation to ensure Kerala's continued progress and development.