Netizens Question Modi on Kerala’s Reduced Central Tax Share During Thiruvananthapuram Visit

Thiruvananthapuram: As Prime Minister Narendra Modi visited Thiruvananthapuram, netizens raised pointed questions about Kerala’s sharply reduced central government revenue share and alleged fiscal discrimination, with the hashtag #KeralaAskModi trending across all social media platforms.

Until five years ago, Kerala generated 55 percent of its total revenue, with the remaining 45 percent coming from the centre. Today, the state is expected to generate 70 percent of its revenue, with the central share reduced to 30 percent. By comparison, some states continue to receive 50–70 percent of their revenue from the central government.

The reduction is linked to the population -based allocation formula used by the Fifteenth Finance Commission, which adopted the 2011 census as the base year. Critics argue that this disadvantaged southern states like Kerala, while larger- population states such as Uttar Pradesh received increased shares.

Kerala’s tax share fell from 3.8 percent during the Tenth Finance Commission to 2.5 percent in the Fourteenth, and 1.92 percent in the Fifteenth, while Uttar Pradesh’s rose from 17.8 percent to 19.9 percent. Over the past decade, Kerala suffered a shortfall of about 1.66 lakh crore rupees in its tax share. With a population of 2.8 percent of India’s total, the state continues to receive only 1.9 percent of the divisible pool.

Cuts in central funding have also affected key schemes. Of 18 programmes previously receiving 100 percent central funding, the share has dropped to 60 percent, and two schemes’ funding has fallen to 50 percent. Three schemes that were previously 90:10 now require 40 percent state contribution. In 2023–24 alone, five schemes saw funding revisions and ten schemes were withdrawn.

Major affected schemes include:

• Prime Minister Gram Sadak Yojana (PMGSY): from 100% to 60:40 central funding

• Prime Minister Matsya Sampada Yojana (PMMSY): central share 60%

• National Rural Health Mission (NRHM) and health schemes: 60:40

• Sarva Shiksha Abhiyan and education schemes: central share 60%

• Integrated Child Development Services (ICDS): central share 60%

The state’s share of central schemes has steadily fallen from 0.66% of total domestic revenue in 2015–16 to 0.43% in 2021–22. Between 2014–2024, Kerala received around 50,000 crore rupees through central schemes, of which only 30,000 crore came from the centre.

Netizens also highlighted the increased use of central cesses and surcharges, which are not shared with states, reducing Kerala’s allocation. Furthermore, Kerala uniquely bore 6,000 crore rupees for land acquisition for national highways, a cost fully borne by NHAI in other states.

On public debt, Kerala’s liabilities stand at 33.8% of GDP, compared with the centre’s 56.1%, prompting questions over perceived fiscal misrepresentation.

Netizens in Kerala now ask Modi to explain why Kerala continues to face such fiscal disadvantages despite its population proportion, contributions to national development, and adherence to central schemes.