Union Budget Sidelines Kerala: No AIIMS, No High-Speed Rail, Just Token Coconut and Turtle Projects

Thiruvananthapuram: Despite significant announcements on high-speed rail expansion, the Union Budget once again reflects a pattern of neglect towards Kerala. While neighbouring states such as Karnataka and Tamil Nadu have been included in major high-speed railway development plans, Kerala has been left out entirely. Seven high-speed rail corridors were announced, yet not one has been allocated to the state.

Long -pending demands such as the establishment of an AIIMS in Kerala and special financial assistance for the Vizhinjam port project were also ignored. The Centre further disappointed states by refusing to increase their share of grants to 50 percent, instead retaining it at 41 percent, limiting fiscal flexibility at a time when states face rising expenditure pressures.

Although the budget mentions schemes for agricultural sectors like coconut, cashew, and cocoa, crops strongly associated with Kerala’s economy, the specification of these initiatives is completely ignored in the budget. This omission raises concerns about whether Kerala will genuinely benefit from these sectoral announcements.

The only centrally announced project that includes Kerala is the Mineral Corridor, which proposes to link the state with Tamil Nadu, Andhra Pradesh, and Odisha. However, the Kerala government has already announced plans for a rare earth corridor within the state, making the Centre’s proposal appear less like a fresh development initiative and more like an overlapping intervention.

This raises important questions about intent, particularly whether the project is aimed primarily at facilitating mineral extraction from Kerala, potentially with private sector involvement. In this context, the recent relaxation of mining laws is also a matter of concern, as it may prioritise commercial interests over environmental safeguards and the state’s long-term ecological security.

On the tourism front, the announcement of a sea turtle conservation centre is welcome but modest in scale compared to the state’s broader infrastructure and environmental needs. Uncertainty also continues over whether Kerala will receive one of the three proposed Ayurveda institutions, despite the state leading in that sector in India.

On the taxation front, there are no changes in income tax slabs or rates, offering little relief to the middle class. The decision to exempt motor accident compensation from tax is a positive step, but it is a limited concession in an otherwise status-quo tax framework. Taxpayers have until July 31 to file returns, and the budget notes that new legal provisions will come into force in April.

Overall, the budget appears to have overlooked several of Kerala’s core demands, reinforcing perceptions of uneven regional prioritisation rather than balanced national development. It threatens the very essence of federalism, as the Modi government seems to be targeting states where the BJP has little influence. In this context, the principles of federalism appear to have been sidelined in the budget.