Kerala Budget: Balagopal accuses Centre of undermining federalism, says State’s rights under attack

Thiruvananthapuram: Kerala Finance Minister K.N. Balagopal on Thursday launched a sharp attack on the Centre while presenting the State Budget 2026, accusing the Union government of undermining federalism and encroaching upon states’ financial rights.

“Federalism is the soul of India, and attempts are being made to destroy it,” Balagopal said, adding that the budget records Kerala’s protest against the Centre’s moves to weaken the federal structure.

"Venomous communal serpents are lying in wait to destroy the collective unity of Kerala. The new strategy being taught by election experts is to brand those who build a people’s unity as a shield against communalism. We dismiss such branding with contempt. We have been among the people for at least a century,” he added. 

He alleged that the Union government had reduced the State’s share of tax revenue, curtailed borrowing limits, and signalled the beginning of the end of the employment guarantee scheme. 

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“The Centre is usurping the economic powers of states. There is an encroachment on the financial rights of the State,” the Finance Minister said.

Balagopal said Kerala had managed to withstand the Centre’s “indifference” towards the State. “There has been no decline in development. Under the pretext of fiscal discipline, the Centre is cutting the State’s rightful share. The State’s debt remains within a sustainable limit,” he said.

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Earlier, presenting his sixth budget in the Assembly, Balagopal said, “I am presenting the budget with great happiness and pride. This is the sixth budget that I am presenting. Each budget I have presented on behalf of the state government has been an announcement of carefully planned programmes aimed at fulfilling the promises made to the people during the election period. We have presented before the people the progress achieved in implementing the commitments made in the election manifesto. The progress reports presented during the tenure of the previous government have been widely discussed. With the satisfaction that the promises made have been almost fully implemented, today’s budget is being presented.”

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He said Kerala had transformed significantly over the past decade. “Today’s Kerala is not the Kerala of ten years ago. In every sector, Kerala has created a new normal. The progress achieved in all spheres of people’s lives is remarkable, so much so that even the old normal cannot be compared with it,” he said.

Balagopal added that the government was ready for an open discussion on development achievements. “During this session of the Assembly, we wish to discuss the changes that have taken place in every development sector. With facts, figures, and examples, we are prepared to present the proud achievements Kerala has attained. We are ready to patiently listen to what the opposition has to say. If such a discussion takes place in the Assembly, it will be a good model of democracy,” he said.