Union Budget 2026 | Kerala sees limited gains; leaders express dissatisfaction

Thiruvananthapuram: Expectations had been running high across Kerala's political spectrum -- from the ruling LDF to the Opposition Congress-led UDF and even leaders within the state BJP, on at least two major Union Budget announcements for the state-- a high-speed rail corridor and the sanctioning of an AIIMS.

Neither materialised on Sunday, when Union Finance Minister Nirmala Sitharaman presented the budget for 2026-27.

Kerala found little else to cheer in the Budget presented by Sitharaman, with several long-anticipated projects missing from Centre's plans. The state was not included in the proposed high-speed rail corridors, while neighbouring Tamil Nadu, Karnataka and Telangana featured in the network expansion.

Expectations were driven by the upcoming Assembly elections, with the BJP seeking to make inroads in a state largely dominated by the CPI(M)-led LDF and the Congress-led UDF.

However, the Budget did include Kerala in a broader industrial initiative.

A scheme for Rare Earth Permanent Magnets, launched in November 2025, proposes support for mineral-rich states including Odisha, Kerala, Andhra Pradesh and Tamil Nadu. The plan envisions dedicated Rare Earth Corridors to boost mining, processing, research and manufacturing in the sector.

In the environmental sector, the Centre announced the establishment of "Turtle Trails" along key nesting sites in coastal regions of Odisha, Karnataka and Kerala, aimed at conservation and eco-tourism.

There was also attention on Thiruvananthapuram Corporation, where the BJP recently came to power, ending over four decades of Left rule. While the Budget was expected to carry a notable urban-focused announcement linked to the civic body, no major project specifically targeting the corporation was outlined.

While the state BJP leaders said they would react after studying the budget, the ruling Left and the Opposition UDF expressed dissatisfaction for not announcing major projects for the state.

Industries Minister P Rajeev said that following recent discussions on the high-speed railway line, there was an impression that Kerala would get the fast mobility project in the Budget.

"In spite of Kerala being the first to submit a proposal to the Centre, it was not considered," he said.

Rajeev said that when the state had earlier decided to implement a similar project, permission was denied by the Centre.

"Now the Centre has announced the project, and not including Kerala amounts to discrimination," he said.

On AIIMS, he said the Centre had directed the state to suggest three locations, following which it was asked to shortlist one.

"Even though land under the Industries Department, which was in high demand, was handed over to the Health Department at Kinalur for AIIMS, it was not sanctioned. The NDA government has announced several AIIMS before, but Kerala has not been allotted one," he said.

Rajeev also referred to the Rare Earth corridor announced by the state, and expressed concern over proposed amendments that would allow the Centre to acquire Rare Earth resources bypassing the state.

"It is not clear whether the announcement is aimed at taking Rare Earth resources to other places. This needs to be examined, as Rare Earth resources currently lie with the states," he said.

From the first impression, the state appeared to have been "neglected" in the Budget, he added.

CPI(M) MP John Brittas told reporters in New Delhi that, considering the upcoming Assembly elections, there was an expectation that Kerala would at least receive some allocation.

He said the Kerala Finance Minister K Balagopal had raised 29 key demands after meeting Sitharaman ahead of the Budget.

"However, it is unfortunate that nothing was granted to Kerala, either at the micro or macro level," Brittas said.

He alleged that the BJP government had tried to mislead the people of Kerala by propagating the high-speed rail project using 'Metroman' E Sreedharan.

"The state government had doubts about it, as the announcement was made by Sreedharan, whereas such a project should be announced by the Union Railway Minister," he said.

RSP and UDF MP N K Premachandran said the Budget failed to address key issues related to unemployment and investment in the country.

"Seven high-speed rail corridors were announced, but Kerala was left out. Sreedharan had announced that Kerala would get the project, but it was not included in the Budget," he said.

He said the failure to allot an AIIMS to Kerala showed neglect towards the state.

Premachandran said the announcement of a National Corridor for Rare Earth Minerals was a welcome move and was expected to help Kerala’s economy.Union Budget 2026

He also said the coconut and cashew agriculture assistance schemes announced in the Budget would help farmers, adding that he would comment further after examining the details.