
THIRUVANANTHAPURAM: Kerala is facing financial stress due to “tapering of revenue deficit grant and cessation of GST compensation,” Governor Rajendra Vishwanath Arlekar said in his maiden policy address in the Kerala Assembly on Friday.
This is despite the state taking earnest measures for revenue mobilisation and rationalisation of expenditure, he said at the start of the 13th session of the 15th Kerala Legislative Assembly.
Kerala is facing a liquidity crisis due to declining shares from Union transfers. Kerala’s share in the central divisible pool steadily declined from 3.875% during the 10th Finance Commission to 1.925% under the 15th Finance Commission.
“The cessation of GST compensation and revenue deficit grants coupled with restrictive conditions on Centre-sponsored schemes and new borrowing constraints have posed significant fiscal challenges for my government. Yet, despite these hurdles, my government has remained steadfast in fulfilling the promises made to the people of Kerala,” he said.
Augmenting the fiscal capacity of the state is imperative to ensure that the social security pension to 62 lakh beneficiaries is not impeded.
The state effectively presented its case before the Sixteenth Finance Commission and the state is hoping for the best. “The commission’s chairman described the efforts as ‘incredibly impressive’, a testament to the dedication and meticulous planning of my government,” he said.
Over the past decade, Kerala faced a series of devastating disasters, including the 2018 and 2019 floods, Cyclone Ockhi and Meppadi landslide. Kerala’s disaster management model, rooted in community resilience, technological integration and proactive governance, has garnered global recognition as a beacon of effective crisis response.
“My government is committed to rehabilitating all those affected by the Meppadi landslide by ensuring the completion of the townships within one year,” he said.
Policy address sets the tone for guv-govt relations
Governor Rajendra Arlekar’s maiden policy address before the state assembly on Friday, paved a marked difference from the previously warring governor-government relations of the past five years. Contrary to earlier times, both the government and the governor chose to avoid the path of confrontation.
Unlike in the past, wherein the Raj Bhavan and the LDF government were engaged in an open tussle, Friday’s policy address proved more or less uneventful. In an obvious move not to provoke the governor, the government visibly toned down its criticism of the centre. On the other hand, the governor on his part, chose not to skip any remarks in the address.