Union Budget shows economic stagnation, Centre lacking funds: Kerala FM

Kerala Finance Minister K N Balagopal on Sunday said the Union Budget indicated stagnation in the Indian economy and showed that the Central government was facing a shortage of funds. Speaking to reporters after the Budget, Balagopal said the tax proposals reflected an attempt to facilitate international trade agreements rather than strengthening the domestic economy.

Kerala Finance Minister K N Balagopal on Sunday said the Union Budget indicated stagnation in the Indian economy and showed that the Central government was facing a shortage of funds. Speaking to reporters after the Budget, Balagopal said the tax proposals reflected an attempt to facilitate international trade agreements rather than strengthening the domestic economy. ''A major portion of the Budget speech was devoted to taxes. But if you look at it closely, there were no major announcements on taxation,'' he said. He alleged that the tax recommendations were not made in the interest of the country but to accommodate international trade deals, including those involving the European Union and pressures arising from former US President Donald Trump's tariff policies. ''There is nothing significant in the Budget that will drive the economy forward,'' he said. He alleged that after Trump's tariff war, India had been conceding several demands, a trend that continued in trade negotiations with the European Union. ''The tax exemptions largely favour foreign travel, foreign investments and NRI investments. The stock market has fallen, which may not be connected to economic fundamentals, but because the basic expectations from the Budget were not met,'' he said. Balagopal said the Budget reflected a lack of economic growth, pointing to poor growth in revenue receipts, which, according to him, indicated that tax reforms and other steps taken by the Centre had adversely affected the economy. ''Often, Budget projections are not achieved due to crises. But now there is clear stagnation affecting the Indian economy. The Budget itself shows that expenditure in several sectors has been reduced,'' he said. Balagopal said allocations for agriculture and food subsidies had been reduced, and similar cuts were seen in health, education, and science and technology sectors. He said that while Rs 67,000 crore was allocated for the Jal Jeevan Mission in the previous Budget, only Rs 17,000 crore was spent. ''All these indicate that the Central government does not have sufficient funds,'' he said. Investment in the rural sector had been reduced, which would affect employment generation and fund flow, he said, calling it a major drawback of the Budget. He said the allocation for MNREGA had been reduced from Rs 81,000 crore in the previous Budget to Rs 30,000 crore, while the Kerala government had allocated Rs 1,000 crore from its own funds for rural employment schemes. ''It will have a negative impact. If expenditure is curtailed, money in the hands of the people will reduce, and there will be no economic growth,'' he said. Balagopal said Kerala's key demands, including funds for the further development of Vizhinjam port and a dedicated cargo corridor from the port, were not considered. The state's proposal for high-speed rail connectivity was also ignored, even as similar projects were sanctioned for other states, he added. ''There is a project for turtle conservation this time, but it is not clear how it will benefit the people,'' he said. Balagopal said Kerala's request for a special package of Rs 21,000 crore was not approved. He added that there were no announcements on AIIMS and the Sabari rail project either. ''Additional fund allocation for ASHA and Anganwadi workers was also sought, as the Centre's share has not been revised for the past 12 years, but that too was ignored,'' he said. On the proposed Rare Earth Corridor in the Union Budget, which includes Kerala, Balagopal said the state wanted industries set up in Kerala to process minerals rather than transport them out of the state.

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