K.N. Balagopal (File photo).
K.N. Balagopal, Kerala’s outgoing Finance Minister, has refuted senior Congress leader V.D. Satheesan’s stand that the United Democratic Front (UDF) is inheriting an empty treasury from the CPI(M)-led Left Democratic Front (LDF).
Speaking to The Hindu, Mr. Balagopal said Kerala is in a comfortable position financially. Fiscal indicators including the State’s revenue, fiscal deficit and debt testify to this, he said.
Following the UDF’s landslide 102-seat victory in the April 9 State Assembly elections, the spotlight was turned on State finances when Mr. Satheesan, Kerala’s Leader of Opposition during the 2021-2026 period, remarked at a post-victory press conference that the UDF has inherited a treasury so empty that a cat and her newborns had made it their home.
“If you take basic financial criteria, Kerala is ahead now. Not only is there no cat, the State is in a very good position. In fact, there is a cash balance of approximately ₹6,000 crore. I offer my best wishes to the new government and the new Finance Minister. We have placed State finances in a comfortable position from where the new government can make it even better,” he said.
‘Based on data’
Mr. Balagopal said his claims were not “political” but based on hard data in Reserve Bank of India (RBI) reports, various Central government studies and reports of the Comptroller and Auditor General of India (CAG).
“Kerala’s revenue has now increased to over ₹1 lakh crore—State’s own tax and non-tax revenues combined. Fiscal deficit is within the limits. In the case of debt-to-Gross State Domestic Product (GSDP) ratio, Kerala had closed in on the 39%-mark during the COVID-19 pandemic. It now stands at 33.4%. The pattern of the past 25 years shows Kerala’s total debt doubles or increases by at least 90% every five years. At that rate, it should have escalated to ₹6 lakh crore now, but it stands at ₹4.8 lakh crore. These ratios are in black and white. They show improvement in Kerala’s financial status,” he said.
Unlike Congress-ruled Himachal Pradesh, Telangana or Karnataka that have in recent times found it difficult to pay salaries and pensions, Kerala faces no such situation, Mr. Balagopal said. “If a cat had given birth in the treasury, how could we have released the salaries and welfare pensions? There is no such situation,” he added.
The LDF is stepping down from the government after considerably improving tax collection and leaving no major dues, other than the outstanding ones in dearness allowance arrears, Mr. Balagopal said. “When I took over five years ago, we needed an additional ₹32,000 crore annually compared to the previous year [pay revision requirements included]. In five years, all dues have been settled. The new government won’t have to assume that big a burden,” he said.
Further, the 16th Finance Commission awards have brought good results for Kerala (State’s share is up from 1.92% to 2.382%) on account of the homework done by the LDF government and in presenting the State’s case before the commission. “True, the commission has not recommended revenue deficit [RD] grant or State-specific grants. But there was no RD grant last year or the year before that either,” he said.
KIIFB’s success
Mr. Balagopal also described the Kerala Infrastructure Investment Fund Board (KIIFB) as a “successful” model that has helped to speed up infrastructure development. KIIFB had been a source of LDF-UDF and Centre-State conflict during the ten-year LDF rule, largely on account of off-budget borrowings. On the Budgets he had presented over the five years as Finance Minister, Mr. Balagopal said he had taken care to make sure that development and employment opportunities were amply explored alongside the focus on welfare spending.
In his May 4 press conference, Mr. Satheesan promised measures on the part of the UDF government to fill the treasury through efficient financial management and tax administration.
Published – May 09, 2026 05:12 pm IST
