The Union Budget for 2026–27 has triggered a sharp political slugfest in Kerala, with the BJP in Kerala blaming the Left government for stalled projects, while the ruling LDF and Opposition UDF accuse the BJP-led Centre of sidelining the state ahead of Assembly elections.

The Budget’s failure to announce long-anticipated projects such as a high-speed rail corridor and an AIIMS has intensified political sparring across party lines.

BJP deflects criticism, targets state government

Facing criticism over the absence of major Kerala-specific announcements, the BJP on Sunday shifted responsibility to the state government, alleging failure to implement projects already sanctioned by the Centre.

Speaking to reporters after the Budget, BJP state president Rajeev Chandrasekhar said the Modi government had lifted India from a weak economy to the world’s fourth-largest economy and that the Budget reflected medium- and long-term strategies.

He alleged that over the last 11 Budgets, several projects were announced for Kerala but were not implemented by the state government. Referring to PM Awas Yojana, Jal Jeevan Mission and Ayushman Bharat, he said the Left government, which claims Kerala received nothing, should first implement what had already been sanctioned.

“In 2017, it was said that AIIMS would be allotted either to Madurai (in Tamil Nadu) or Kerala, but land acquisition was not completed,” he said.

He said the state government should stop alleging neglect and instead answer questions on implementation.

“For Kerala to get new projects and achieve development, there should be an NDA government in the state. If a double-engine government comes, misgovernance and inefficiency will go, and development activities will take place,” he said.

High-speed rail, AIIMS omissions fuel backlash

Expectations had been high across Kerala’s political spectrum — from the CPM-led LDF and Congress-led UDF to leaders within the state BJP — for announcements on a high-speed rail corridor and an AIIMS.

Neither materialised when Union Finance Minister Nirmala Sitharaman presented the Budget on Sunday. Kerala was also excluded from the proposed high-speed rail corridors, while neighbouring Tamil Nadu, Karnataka and Telangana featured in the expansion.

Expectations were heightened by the upcoming Assembly elections, with the BJP seeking to make electoral inroads in the state.

When reporters pointed out that land for AIIMS had already been acquired and that ‘Metroman’ E Sreedharan was set to open an office for the high-speed rail project, Chandrasekhar said the Budget contained several programmes aimed at youth in manufacturing and agriculture.

“These are all-India schemes, but the state government should have the capacity to implement them,” he said.

He said the Modi government believed in performance rather than slogans.

“Where India was 11 years ago and where it is now is the best example,” he said.

Chandrasekhar also said the BJP was ready to debate with the chief minister on development carried out in Kerala over the last 10 years.

What Kerala gained amid major misses

Despite the absence of marquee infrastructure projects, the Budget did include Kerala in a wider industrial initiative.

A Rare Earth Permanent Magnets scheme launched in November 2025 proposes support for mineral-rich states including Odisha, Kerala, Andhra Pradesh and Tamil Nadu. The plan envisages dedicated Rare Earth Corridors to boost mining, processing, research and manufacturing.

In the environmental sector, the Centre announced “Turtle Trails” along key nesting sites in coastal regions of Odisha, Karnataka and Kerala, aimed at conservation and eco-tourism.

Attention was also on Thiruvananthapuram Corporation, where the BJP recently came to power, ending over four decades of Left rule. However, no major urban-focused project specific to the civic body was announced.

Left and UDF allege discrimination, misleading signals

Industries Minister P Rajeev said recent discussions on the high-speed rail corridor had created an impression that Kerala would be included in the Budget.

“In spite of Kerala being the first to submit a proposal to the Centre, it was not considered,” he said.

He said that when the state earlier planned a similar project, permission was denied by the Centre.

“Now the Centre has announced the project, and not including Kerala amounts to discrimination,” he said.

On AIIMS, Rajeev said the Centre had asked the state to suggest locations and later shortlist one.

“Even though land under the Industries Department, which was in high demand, was handed over to the Health Department at Kinalur for AIIMS, it was not sanctioned. The NDA government has announced several AIIMS before, but Kerala has not been allotted one,” he said.

He also raised concerns over proposed amendments related to Rare Earth resources.

“It is not clear whether the announcement is aimed at taking Rare Earth resources to other places. This needs to be examined, as Rare Earth resources currently lie with the states,” he said.

From the first impression, Kerala appeared to have been “neglected” in the Budget, he added.

CPM MP John Brittas said Kerala Finance Minister K Balagopal had raised 29 key demands after meeting Sitharaman ahead of the Budget.

“However, it is unfortunate that nothing was granted to Kerala, either at the micro or macro level,” he said.

He alleged that the BJP government misled the public by propagating the high-speed rail project using E Sreedharan.

“The state government had doubts about it, as the announcement was made by Sreedharan, whereas such a project should be announced by the Union Railway Minister,” he said.

RSP and UDF MP N K Premachandran said the Budget failed to address unemployment and investment.

“Seven high-speed rail corridors were announced, but Kerala was left out,” he said, adding that the failure to allot an AIIMS showed neglect towards the state.

He welcomed the Rare Earth corridor announcement and agriculture assistance for coconut and cashew farmers, saying he would comment further after examining the details.