The Kerala Assembly budget session opened on Tuesday with Governor Rajendra Vishwanath Arlekar giving the policy address of the Left Democratic Front (LDF) government which highly criticized the Union government saying it had severely cut down finances on the state. The address claims that these measures have plunged Kerala into a state of deep fiscal distress, and have compromised the constitutional doctrine of fiscal federalism.
Having read the policy document the Governor told that despite the remarkable progress in the social development and good institutional structure, Kerala still experiences acute financial stress because of the number of negative measures taken by the Centre. The speech charged the Union government with over centralisation of power and meddling in areas within the jurisdiction of the states and taking long to pass bills passed by state legislatures.
The policy statement has pointed to certain monetary choices that have aggravated the situation in Kerala. It observed that the Centre had reduced without due reasons the ₹12,000 crore that Kerala was expected to get during the last quarter of the 202526 financial year with impunity. It was at a crucial point, the address indicated, that the state needed money to help it clear the necessary expenditure obligations.
Besides, the Governor mentioned that Kerala owes large sums of money under the different centrally sponsored schemes, which are yet to be paid. As of September 2025, outstanding dues, arrears of past financial years, are 5,650.45 crore. These postponements and reductions, according to the policy document, have put an enormous burden on state finances and compromised its capacity to roll out welfare programmes and development projects.
The speech ended with the appeal to the Union government to not forget the spirit of cooperative federalism and provide adequate and proper financial assistance to states in time.
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