Kerala facing liquidity stress due to decline in union fiscal transfers: Governor's address

Thiruvananthapuram: The budget session of the Kerala assembly commenced on Friday with Governor Rajendra Vishwanath Arlekar reading out the Left government's policy which claimed that the state was facing a liquidity stress due to declining share of union fiscal transfers.

In his policy address marking the commencement of the 13th session of the 15th Kerala Legislative Assembly, Arlekar said the state "has been facing stress on government finances" despite taking "earnest measures" for revenue mobilisation and rationalising expenses.

The reason for this was the "tapering of revenue deficit grants and cessation of GST compensation", he said while reading out the policy address prepared by the state government.

Arlekar said that the state government has highlighted problems faced by it and the ameliorative measures to the 16th Finance Commission in a detailed memo.

He further said that the Kerala government has a firm commitment to the Constitutional values of Secularism, Democracy, Federalism, Social Justice and respecting diversity while preserving unity and it was of the view that "any attempts to homogenise differences in a country which has accommodated diversity with respect will run counter to these values and lofty ideals of the nationalist movement".

Besides this, the Governor said, the state government was also committed to rehabilitation of all those affected by the devastating landslides that hit Wayanad's Meppadi panchayat in July last year by ensuring completion of a township within one year.

"The government is committed to taking initiatives to build a disaster resilient Kerala," he said.

As part of that endeavour, the state government with its own initiatives and requisite help from the Centre, will take all possible steps to build capabilities to cope with the impact of climate change, Arlekar said.

During his nearly two hour long address, the Governor also read out in detail the accomplishments of the state government in the various sectors, like health, education, agriculture, fisheries and infrastructure, and the initiatives being taken to further develop them.

He said that the state government has made conscious efforts "to revitalise the agriculture sector in an environment friendly manner" and "to achieve an accelerated economic growth and generation of productive employment".

He said that initiatives like the Kerala Agro Business Company -- which is said to raise Rs 100 crore in equity capital -- and the Rs 2,365.48 crore Kerala Climate Resilience and Value Addition (KERA) Project, will establish four agri-parks, promote climate-resilient farming and rejuvenate plantations.

Additionally, a project called 'NAWO-DHAN' has been implemented to create fallow-free villages, the Governor said.

Arlekar further said that the government was taking efforts to make Kerala an investment destination and the same were showing tangible results as the state now ranks number one in providing a conducive environment for ease of doing business.

"My Government has been placing emphasis on improving the physical infrastructure of the state. In the Transport sector, my Government shared costs with the Union Government to make sure that the National Highway widening work proceeds smoothly.

"My Government has been pressing the Union Government to sanction rail development projects to the State for reducing the travel time and time for freight in transit. My Government has ensured that the major infrastructure projects, of which the Vizhinjam Port needs special mention, are completed on time," the Governor said in his address.

He also referred to the various steps taken by the government to make Kerala a knowledge society, within the shortest span of time possible.

"In this context it is pertinent to note that the state has developed a robust ecosystem for startups," he added.

Arlekar further said that the government was committed to creating a Kerala without landless people and in that endeavour, it has allocated land titles to 1,80,887 families in the last three years.

"But we still do face the problem of homelessness. In the last eight years, the present and previous Governments have made major strides in providing secure homes to 4,24,800 families. Agreement for providing secure homes for 1,13,718 families has been signed, taking the total to 5,38,518 families.

"Right to secure housing has been recognised as a basic human right internationally; my Government is taking earnest steps to make this a reality in the state." he said.

The Governor said that while taking all the measures for creating an environment conducive for higher economic growth, the government does not intend to wait for the benefits of the same to trickle down to everyone.

"With this in mind, my Government has initiated focused welfare programmes for the needy sections of the society. My Government also has a vision to endow Kerala with high quality infrastructure.

"To achieve this, we have taken well intentioned measures to step up capital investment. My Government requests the Union Government to take an encouraging and positive view of this," the Governor said towards the conclusion of his address.

The 13th session will meet for 27 days from January 17 to March 28, as per the legislative assembly calendar.

The discussion on the motion of thanks to the Governor's address will be held for three days from January 20 to 22.

Kerala Finance Minister K N Balagopal will present the Budget for the Financial Year 2025-26 in the House on February 7.