KOCHI: Kerala could face a fiscal shortfall of nearly Rs 20,500 crore in the current financial year after the revenue deficit grants projected in the state’s 2026-27 Interim Budget failed to materialise, Chief Minister V. D. Satheesan has said. In a post on X on Thursday, Satheesan criticised the 2026-27 Interim Budget presented by the previous Left Democratic Front (LDF) government in the state, alleging that it was based on flawed assumptions regarding central transfers. According to the Chief Minister, the budget had projected Rs 14,138 crore as revenue deficit grants from the Centre. However, Satheesan pointed out that the 16th Finance Commission has not awarded any such grant to Kerala, leaving a significant gap between the state’s budget estimates and the actual flow of funds.
“The 2026–27 Interim Budget presented by the #LDF Government rests on flawed assumptions. It projected Rs14,138 crore as Revenue Deficit Grants, yet the 16th Finance Commission has made no such award. As a result, Keralam faces an estimated shortfall of nearly Rs 20,500 crore in central transfers this year,” the Kerala CM said in the X post. Satheesan said that the absence of the projected grant would result in an estimated shortfall of nearly Rs 20,500 crore in central transfers during the financial year. He warned that the development poses a serious challenge to Kerala’s finances and could affect the state’s ability to meet its expenditure commitments. Satheesan also questioned the credibility of the budget assumptions made by the previous LDF government. He said the failure of the projected revenue deficit grants to materialise raises concerns over the sustainability of the state’s fiscal planning and the accuracy of the estimates on which the interim budget was prepared. (IANS)
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