The Finance Commission’s share of tax devolution to Kerala has declined from 3.9 per cent during the 10th UFC period to 1.9 per cent during the current 15th UFC. The state’s share of the centrally sponsored schemes is only 1.6 per cent. Its share in the CAPEX is only 1.1 per cent. It has received virtually nothing from the special packages announced for different states. In 2024-25 the Union government`s total transfer to all the state governments in India was Rs 25 lakh crore. With 2.8 per cent of the population share, proportionately Kerala should have received Rs 70,000 crore. Actually, the transfers to the states were only Rs 35,000 crore, only half of what was its due.The Union government has also arbitrarily reduced the normal borrowing of the state government on the pretext that the capital borrowing made by KIIFB, a SPV similar to the National Highway Authority of India, is equivalent to indirect borrowing by the state. Worse, the central government decided to give retrospective effect to its new rule on extra budgetary borrowing by the state. As a result, during the past three years more than Rs 10,000 crore have been reduced from the state’s market loans. All this has pushed the state government’s finances into a crisis.To cover up its discrimination, the Union government and its followers are conducting completely false, baseless and malicious propaganda against the state government,” said the resolution.
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