Kerala’s Demands Ahead of Union Budget
Kerala’s government has outlined its expectations for the Union Budget 2026-27, presenting a comprehensive list of requests during a pre-Budget meeting with Union Finance Minister Nirmala Sitharaman in New Delhi. Key among these requests is a ‘Special Fiscal Correction Package’ aimed at addressing the state’s severe resource shortfall, estimated to exceed ₹21,000 crore due to borrowing constraints.
State Finance Minister K.N. Balagopal stressed that these proposals aim to enhance national progress rather than being state-specific concessions. Their focus is on leveraging Kerala’s unique capabilities for scalable models beneficial to the broader Indian economy.
Addressing Financial Challenges
Kerala is seeking a Special Fiscal Correction Package to rectify expected losses of ₹17,000 crore stemming from a reduction in the state’s borrowing limit and an additional ₹4,250 crore resulting from changes in the calculation of Gross State Domestic Product (GSDP). The state contends that these adjustments deviate from the 15th Finance Commission recommendations.
Development & Infrastructure Initiatives
Defence Innovation Corridor
A significant highlight of Kerala’s wishlist is the establishment of a defence research and development corridor. This corridor would connect key locations including Vizhinjam, Chavara, and Kochi, thereby maximizing existing infrastructure such as the Naval Academy at Ezhimala and Cochin Shipyard. The proposed corridor aims to enhance defence capabilities and promote local innovation in military technology.
Strategic Rare Earth Corridor Project
In addition to the defence corridor, Kerala is advocating for a ₹1,000 crore Central assistance package focused on developing a dedicated strategic rare earth corridor. This project aims to harness approximately 32.435 million tonnes of coastal mineral sand, including vital rare earth materials essential for various technological applications in defence and aerospace.
Support for Key Sectors
The plan also emphasizes specific packages for the plantation sector, which includes funding for replanting, rejuvenation, and promoting the export of tea, coffee, and spices. Minister Balagopal noted the critical need for value addition in these sectors to ensure a sustainable economy.
Additionally, the state government has reiterated its demand for a dedicated financial package aimed at supporting return migrants. This includes establishing social safety nets to safeguard their livelihoods upon returning to Kerala.
Critical Infrastructure Requests
Sabari Rail Project
Among the long-standing infrastructure demands is the much-anticipated Sabari Rail project, which aims to establish a connectivity link between Angamaly and Erumely. This project has the potential to significantly enhance regional transport networks and foster economic development in the area.
Mother-Ship Building and Maritime Infrastructure
As part of the Vizhinjam port project, Kerala has appealed for Central investments to bolster mother-ship building capabilities and to enhance defence and maritime security infrastructure in the Indian Ocean Region. The integration of the Vizhinjam port into the broader Bharatmala project is also on the agenda.
Policy Adjustments and Future Frameworks
Kerala’s wishlist includes policy adjustments such as the roll-back of the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) scheme. Balagopal has called for the restoration of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) framework, citing its essential role in providing rural employment opportunities.
The emphasis on these provisions highlights the state’s commitment to ensuring robust employment opportunities, which have been a cornerstone of rural development strategies.
Conclusion and Minor Requests
In closing, Kerala’s government continues to advocate for critical investments that not only promise to enrich the state’s local economy but are also anticipated to contribute to national growth. The synergy between Kerala’s development goals and the anticipated support from the Union government underscores the importance of collaborative efforts to address pressing economic challenges.
Kerala’s efforts reflect a proactive stance in driving forward-looking policies that aim to capture potential opportunities in various sectors, ensuring long-term benefits for its residents.