Kerala has reacted sharply to Union Budget 2026, calling it one of the most disappointing budgets for the state in recent years. Finance Minister KN Balagopal stated on February 1 that Kerala received virtually nothing from the Centre despite placing several key demands ahead of the budget, including an AIIMS hospital, inclusion in high-speed rail corridors, and enhanced financial assistance.
Although the budget mentioned Kerala in two proposals a rare earth minerals corridor and tourism-related “turtle trails” state leaders argued these were minor announcements that failed to address core developmental needs. Opposition parties, including the Congress and CPI(M), accused the Union government of deliberately neglecting Kerala and southern states, especially at a time when Kerala and Tamil Nadu are heading for elections.
The budget has reignited long-standing debates over federalism, tax devolution, and whether economically performing states are being unfairly treated by the Centre.
Kerala Voices Anger Over Missed Opportunities
Shortly after Finance Minister Nirmala Sitharaman presented the Union Budget in Parliament, Kerala Finance Minister KN Balagopal addressed the media and expressed deep disappointment. He said the budget had completely ignored Kerala’s major demands and offered no roadmap for the state’s economic progress.
“Apart from Kerala getting nothing, the overall budget is disappointing,” Balagopal remarked, adding that there were no new measures to strengthen the state’s economy or support its infrastructure ambitions.
The minister emphasised that Kerala had repeatedly sought central support for crucial projects such as an All India Institute of Medical Sciences (AIIMS), high-speed rail connectivity, and special packages for sectors like health and higher education. None of these found mention in Budget 2026.
Instead, Kerala was referenced only in two comparatively small initiatives one involving the creation of a rare earth minerals corridor and another promoting tourism through turtle trails along the coastline. Political reactions were swift and sharp. Kerala’s Minister for Fisheries, Culture, and Youth Affairs sarcastically commented that “all Kerala got from the Union Budget is a turtle egg,” reflecting widespread frustration within the state government.
Congress MP Shafi Parambil accused the Union government of acting as though Kerala “does not exist on the map of India,” while CPI(M) MP John Britas criticised the exclusion of Kerala from all seven newly announced high-speed rail corridors. These responses highlighted the growing anger among Kerala’s political class over what they see as consistent neglect by the Centre.
Election-Year Expectations and Southern Discontent
The disappointment is particularly intense because 2026 is an election year in Kerala, Tamil Nadu, and the Union Territory of Puducherry. Many in Kerala expected that the Centre would make significant announcements to address long-pending infrastructure and healthcare demands.
Over the years, successive Kerala governments have lobbied for an AIIMS to strengthen the state’s public health system, and BJP leaders in the past had also promised to push for such a facility. Its absence from the budget has therefore become a major political flashpoint. Similarly, Kerala had hoped to be part of India’s expanding high-speed rail network.
While Budget 2026 announced corridors linking cities such as Mumbai, Pune, Hyderabad, Bengaluru, Chennai, Delhi, Varanasi, and Siliguri, no Kerala city was included. Opposition leaders pointed out that Kerala had earlier proposed the K-Rail semi high-speed project, but faced obstacles from the Union government.
In this context, the new exclusions have been interpreted as deliberate sidelining. More broadly, southern states have once again raised concerns about fiscal federalism. Although the budget accepted the 16th Finance Commission’s recommendation to retain tax devolution at 41 per cent, states like Kerala, Tamil Nadu, and Karnataka argue that the current revenue-sharing formula penalises them despite their strong economic and social performance.
Beyond Kerala, Budget 2026 offered little for the southern region except a few tourism-related initiatives such as birdwatching trails in Andhra Pradesh and Tamil Nadu and mountain trails along the Kerala–Tamil Nadu border. Many regional leaders feel these announcements fall far short of what is required to drive real development.
The Logical Indian’s Perspective
The reactions from Kerala underline a larger and recurring challenge in India’s federal structure how to ensure that development is balanced, inclusive, and sensitive to regional aspirations. Budgets should be instruments of national integration, not sources of division or resentment. When a state with strong social indicators and economic potential feels ignored, it raises legitimate questions about the priorities of the Union government.
Healthy democracy demands that every state, regardless of its political alignment, receives fair consideration and opportunities for growth. At the same time, constructive engagement between the Centre and state governments is essential to resolve disputes over projects, funding, and policy implementation. Political disagreements should not come in the way of developmental cooperation. The people of Kerala, like citizens everywhere, deserve investments in healthcare, transport, and infrastructure that match their contributions to the national economy.
