Kerala’s Central Share Falls from 34% to 25% in Four Years: K N Balagopal

Thiruvananthapuram: Kerala Finance Minister K N Balagopal on Sunday accused the Union Government of financially strangling the state through discriminatory fiscal policies, delayed fund disbursals and rigid conditions that undermine the federal structure of the country.

Addressing a press meet, Balagopal said Kerala’s share of central funds had declined sharply over the last four years. “When I assumed charge as Finance Minister, Kerala was getting around 34 per cent of the Centre’s share. Now it has fallen to nearly 25 per cent. Why is Kerala’s share decreasing year after year?” he asked.

He said the issue was not limited to the PM SHRI scheme but reflected a broader pattern of fiscal discrimination. “The state government, which is eligible for certain funds, should receive them without preconditions. But the Centre continues to tighten control and limit allocations,” he said.

Balagopal compared Kerala’s fiscal position with that of other states, highlighting stark disparities. “Bihar receives nearly 75 per cent of its revenue from central taxes and grants, while Uttar Pradesh gets 53 per cent. Orissa, Assam and Jharkhand continue to draw about 3.5 per cent each from the central pool. But Kerala’s share keeps shrinking. We have no mineral royalties like iron ore or coal, which bring Orissa around 30,000 crore rupees. The Finance Commission has now understood this disparities and they are willing to consider modifications,” he said.

He argued that Kerala’s progress in education, healthcare and infrastructure was now being used against it. “Since we have advanced in these sectors, the Centre imposes conditions that simply don’t fit our context. Schemes should have flexibility. You can’t expect every region to wear the same uniform,” he remarked.

Balagopal alleged that the Centre was using funds as a political tool. “Even states not ruled by the opposition have raised similar complaints in the GST Council. Thousands of crores are pending. The Centre is denying Kerala what it rightfully deserves,” he said.

Clarifying Kerala’s stance on the PM SHRI programme, he said the issue lay in the linking of unrelated funds. “The PM SHRI scheme alone doesn’t constitute 1,500 crore rupees. But when you combine all allocations the Centre is denying,textbooks, uniforms, scholarships and teachers’ salaries, the total exceeds that amount. Our education sector is being punished because we won’t sign a conditional scheme,” he said.

He reiterated that Kerala is not opposed to central schemes but to the conditions that curtail state autonomy. “Each state has its own development path. To say we’ll only get funds when others reach our level of progress is illogical. Every state deserves its fair share,” he said.

Reaffirming the LDF government’s position, Balagopal said Kerala had taken every possible step to defend fiscal federalism. “We have protested in Delhi, filed petitions in the Supreme Court and led the fight for state rights. If we were ready to compromise, we wouldn’t have done any of that,” he said.

He also criticised the Centre for denying adequate disaster relief following the Chooralmala tragedy, while extending aid to other states hit by natural calamities this year.

“Even in the United States, each state has its own tax system. But here, a single code is imposed, and the Centre decides who gets what. That’s not cooperative federalism, it’s control,” Balagopal warned, calling the current system a “serious erosion of fiscal balance”.

He urged the media to highlight the human cost of fiscal discrimination. “When funds are withheld, it’s not just numbers on paper. It affects our children’s education, our healthcare, our roads. These are matters that shape daily life. The people of Kerala deserve to know how central policies are hurting their future,” he said.