Despite central neglect, Kerala survived and created 'new normal' : FM Balagopal

Thiruvananthapuram, Jan 29 (PTI) Kerala Finance Minister on Thursday said that the state not only survived the Centre's neglect and economic restrictions, it progressed in all walks of life and created a "new normal" in almost all sectors.

In his budget speech, he said that the central government has been attempting to "suffocate" the state government in the last quarter by cutting down the previously fixed borrowing limits and rejecting due arrears.

"However, this is temporary. This should be seen only as a bolt from the blue during elections. We are not alone in pointing out that Kerala is in a better position in terms of long-term fiscal prospects. The Reserve Bank of India and the Comptroller and Auditor General have reiterated the same and congratulated the state," he claimed.

The minister said that as the Centre's neglect towards Kerala reached its "zenith" during the current government's tenure, there were "mocking predictions" that the treasury would be closed and salaries would be cut.

When such predictions did not come true, allegations were raised that Kerala survived by cutting down development and welfare expenditure and by borrowing excessively, he said.

Explaining how Kerala not only survived but managed to "stand strong", Balagopal said that "foreseeing the impending danger" from the Centre's side, the state government built a "defensive fortress prioritising government expenses and augmenting its own revenue".

He said that during the last five years, the state generated an additional revenue of around Rs 1,27,747 crore in terms of own tax revenue and it will increase further once the figures of the current financial year are finalised.

The amount was collected in addition to the own tax revenue of Rs 83,731 crore gathered in 2025-26, he said.

Besides that, there was a growth in the state government's own non-tax revenue also, the minister said.

He said that the state collected an additional amount of Rs 24,898 crore towards non-tax revenue and it too was expected to increase once the figures are finalised.

"To summarize, we were able to collect an additional amount of more than Rs 1,52,645 crore towards our own tax revenue and non-tax revenue. This helped us to stand strong despite severe neglect from the central government.

"The additional collected own tax and non-tax revenue was the magic wand in the hands of the finance minister," Balagopal said in his speech.

He said that the tax and non-tax revenue of the state government can be augmented further, but requires the support of the Centre.

Balagopal further said that the government did not cut down its expenditure due to the financial restrictions imposed by the Centre.

He said that the average annual expenditure during the five years of the current government was Rs 1,69,547 crore with the annual expenditure in 2024-25 being Rs 1,73,808 crore.

The expenditure for 2025-26 will be Rs 1,92,456 crore, he added.

"In short, no reduction has been made in the development-welfare expenditure of the government. On the contrary, development expenditure has been raised to the highest level in history.

"Nobody can say that there was a decline in the developmental expenditure in any legislative constituency in the state. Same is the case with government departments. It is in this context that we reiterate that Kerala has created a ‘new normal’ in all regions and all departments," the minister said.

He said that in light of this situation, the question to be asked is not how Kerala survived amidst central neglect, but how much the state would have risen had there been no such restrictions. PTI HMP KH