Kerala’s Leader of the Opposition V.D. Satheesan on Friday (February 7, 2025) termed the Kerala Budget 2025-26 a “false and cruel construct that rang resoundingly hollow and held no promise for the State”
He said the Budget has “exacerbated” the cost of living crisis for working-class people by proposing an “unreasonably high” 50% increase in land tax. Mr. Satheesan demanded that the government roll back the increase or brace itself for intense street agitations.
Also read | Kerala Budget 2025-26 LIVE updates
At a press conference, Mr. Satheesan said the Budget was “an inconsequential and embroidered document replete with false claims and hyperbole.“
He said the Budget had no bearing on public life because the government’s coffers were dry due to years of fiscal mismanagement and lax tax administration.
Consequently, Mr. Satheesan said the government had drastically slashed 2024-25 budgetary funds through a surreptitious and illegal executive order to bypass the appropriations approved by the Legislative Assembly.
Mr. Satheesan said that the “clandestine plan fund cut” halted minority scholarships, Scheduled Caste/Scheduled Tribe welfare schemes, and the Left Democratic Front’s (LDF) flagship LIFE Mission scheme to rid Kerala of homelessness.
“For one, in the previous Budget, the LDF earmarked ₹500 crore for the Life Mission project. With hindsight, it was mere bombast. The government only used 24% of the much-trumpeted allocation because its coffers were starkly empty”, he said.
Mr. Satheesan said the fund crunch had stymied civic works. The government owed contractors crores of rupees for already executed projects. It has denied local bodies their share of the State’s revenue.
He said vendors have stopped supplying to Supplyco, the State’s market intervention agency tasked with mitigating seller inflation. The government owed the suppliers an estimated ₹700 crore, including paddy farmers.
“Finance Minister K.N. Balagopal has shown a patent lack of respect for public intelligence by assigning ₹200 crore for Supplyco. The amount barely covered the agency’s debt. The Minister should explain where Supplyco would raise working capital for the next fiscal”, he asked.
Mr. Satheesan painted a bleak picture of the State’s fiscal situation. The government’s flagship medical insurance schemes, Karunya (for civilians) and Medisep (for government employees) had petered out because the State-owed government and private hospitals significant amounts of money. “Hospitals are increasingly reluctant to honour the insurance schemes, leaving lakhs of patients in the lurch”, he added.
Mr. Satheesan said the Jal Jeevan Mission, a scheme to provide potable piped water to rural households, had halted. “The government owed contractors mammoth outstanding debts. He added that the Centre had withheld its share because the State was unwilling to honour its financial commitment to the ambitious scheme.”
Mr. Satheesan said Mr. Balagopal had “foxed” State employees by stating that the backlog of allowances would reflect in their respective provident fund accounts “sometime in the future”.
‘Misleading figures’
He said Mr. Balagopal had sought to pull the wool over the public eye by claiming a sizeable increase in State revenues. “He had drawn a misleading comparison between current revenues and diminished COVID-era receipts when life and commerce had reached a standstill. He added that he has resorted to deceptively clever jugglery of financial figures to hoodwink the public.
Mr. Satheesan said the State’s plummeting tax revenues begged the question of why Kerala, a consumer State, has not benefited from the GST regime.
Mr. Satheesan said the Kerala Infrastructure Investment Board (KIIFB), a special purpose vehicle created by the previous LDF government, had become a millstone around the State’s neck.
Mr. Satheesan said that despite cautionary red flags raised by the opposition, KIIFB made sizeable non-budgetary borrowings from the open financial market, ostensibly for infrastructure development, with the State as the guarantor.
He said the LDF insulated the KIIFB from legislative and budgetary scrutiny. The organisation invested in non-revenue-generating and “quixotic” projects without any consultation.
“As forewarned, KIIFB’s massive and reckless borrowings have significantly increased Kerala’s debt burden. The government failed to prevent KIIFB from plunging into a financial crisis by supporting it with the State’s consolidated fund (primarily from fuel cess and motor tax). The LDF wants the public to foot the bill for the white elephant’s failures by raising the land tax and considering a proposal to impose a toll on roads,” he added.
Mr. Satheesan said the Budget did not address pressing demographic issues, including the falling birth rate and exodus of young talent to foreign countries.
“The Budget is the LDF government’s swansong, farewell, and disclaim responsibility document for pushing the State into penury through nine years of misrule,” he added.
