Kerala Chief Minister Pinarayi Vijayan has strongly criticised the Union Government, accusing it of denying the state its rightful share in tax devolution and imposing borrowing restrictions that are choking development. Speaking at a public event marking the fourth anniversary of the Left Democratic Front (LDF) government’s second term, Vijayan laid out figures, questioned intent, and painted a picture of a state progressing despite fiscal hurdles.
Vijayan pointed out that Kerala contributed 3.7% to the total own tax revenue generated by all Indian states during 2022–23 and 2023–24. Yet, the state's share in tax devolution from the Centre stood at only 1.53% and 1.13% in those years.
“Going by population, we should have received 2.7%. That means we lost out on ₹2,282 crore in 2022–23 and ₹2,071 crore in 2023–24,” he said. “This is not a favour we’re asking for — it’s Kerala’s rightful share,” he added.
The state has presented this “injustice” to the 16th Finance Commission and has tried rallying other states to raise a united voice, Vijayan noted.
The Chief Minister also alleged that the Centre is limiting Kerala’s borrowing capacity unfairly. “In 2024–25 alone, we are facing a restriction of ₹3,300 crore under the excuse of guarantee limits,” he said.
He accused the Union Government of running a campaign to portray Kerala’s financial management as poor. “This is far from the truth. Our Gross State Domestic Product has grown from ₹5.6 lakh crore in 2018 to ₹13.11 lakh crore now. Per capita income has also significantly increased from ₹1.48 lakh in 2016,” he pointed out.
According to him, this steady growth is evidence of Kerala’s financial resilience, even while facing funding cuts and borrowing restrictions.
Vijayan also made a broader point about the growing fiscal responsibility of state governments. “While the Centre’s contribution to public expenditure is shrinking, states like Kerala are shouldering nearly 70% of the total government expenditure in 2024–25,” he said.
“This increasing burden, coupled with fewer resources from the Centre, puts states at a serious disadvantage,” he added.
Despite the alleged financial roadblocks, Vijayan said Kerala has gone ahead with development initiatives, increased domestic revenue, and shown consistent progress across sectors like infrastructure, IT, and public welfare.
“Kerala hosted India’s first IT park. While others pulled ahead in recent years, we’ve worked hard to regain our edge since 2016. The results are starting to show,” he said.
The CM noted that Kerala’s economic policy has withstood difficult conditions and helped sustain momentum. “We’ve managed to keep going — and that says a lot,” he said.
‘We released our progress report — and people endorsed it’
Reflecting on nine years of continuous LDF governance, Vijayan said, “When we came to office in 2016, we studied the state’s condition and promised action. Except for a few, almost all of those promises have been delivered.”
He claimed that the government’s progress reports have been welcomed by the people and that this fourth-anniversary report was an opportunity to transparently showcase achievements — a practice he says is rare in Indian politics.
Taking on critics of the state’s debt levels, Vijayan cited Reserve Bank of India (RBI) data to say Kerala’s debt-to-GSDP ratio is actually improving. “It was 35.3% in 2022–23 and came down to 34.2% in 2023–24,” he said.
To put that in context, he pointed to other states and the Centre: Bihar stood at 39.3%, Punjab at 47.6%, West Bengal at 38.3%, and the Union Government at 56% in 2023–24.
“These are not political claims. These are facts from the RBI. Our debt ratio is relatively low — and falling. That proves our fiscal management is sound,” he asserted.
Despite presenting the data and arguments to the Finance Commission and others, Vijayan believes the Centre’s “discriminatory attitude” has not changed. “We are being denied funds, burdened with more responsibilities, and targeted with negative narratives,” he said.
But he ended on a note of defiance: “Kerala is not in ruins. Projects are progressing. We are not adrift — we are navigating wisely through tough tides.”