The Kerala Budget for 2025-26 was presented against the backdrop of an ever-deteriorating State finances.
Total outlay is budgeted to grow by 14% from the revised estimates (RE) in the next financial year. RE for the current year casts doubts on all budgeted figures as they display significant variation from Budget Estimates (BE). For example, the Budget size has shrunk to ₹1,78,771 crore (RE) from ₹1,84,327 crore (BE). This is in spite of a slippagein fiscal deficit from budgeted 3.4% to 3.51%. Share of Central taxes is up by ₹1,668 crore whereas grant-in-aid has fallen by ₹3,686 crore. What is to be noted is a dramatic fall in capital outlay from budgeted ₹5,680 crore to a meagre ₹669 crore!
In this context of declining capital expenditure, it is difficult to take the Finance Minister’s announcements on investment projects seriously. Continuing with a State-led development approach is going to take Kerala to deeper crises. The way forward for the State is to make…
