Union Budget disappointing: K.N. Balagopal

Finance Minister K.N. Balagopal on Sunday (February 1, 2026) described the Union Budget 2026-27 as disappointing for the Indian economy as a whole and Kerala specifically.

While the budget featured scant little to push the economy forward, Kerala’s major demands, including an All India Institute of Medical Sciences (AIIMS), high-speed rail project and a ₹21,000 fiscal correction package have been ignored, Mr. Balagopal, speaking to the press in Kollam, said.

The 2025 reforms in the Goods and Services Tax (GST) regime had paralysed the economy, and Union Minister Nirmala Sitharaman’s latest budget does not feature any solution to the problems raised by the States in this regard. Sector-wise allocations also have dipped in many instances compared to the previous budget, he alleged.

Although the Union Budget speaks about ‘Kartavya,’ the fact remains that the Union government has no money for performing its ‘Kartavya,’ Mr. Balagopal said, in an apparent reference to Ms. Sitharaman’s reference in her speech to ‘three Kartavyas’ that inspire the Union government.

On picking Kerala for the ‘Rare Earth Corridor’ scheme, Mr. Balagopal said that the State’s aim was to have related industries established in Kerala. The ‘corridor’ should not be taken to be merely a means for transporting the mined minerals outside the State, he said.

On the 16th Finance Commission hiking the State’s share of the divisible tax pool from 1.92% to 2.382%, he said it would improve the State’s financial situation. The State had asked for a little over 2.7%, he said. But he also drew attention to the fact that the Commission headed by Arvind Panagariya had decided not to recommend revenue deficit grants to the States.

Mr. Balagopal attributed the hike to 2.382% to the “collective hard work” put in by the State government. It had been generally accepted that the dip in Kerala’s share to 1.92% had been unfair, he added.

Mr. Balagopal also pointed out that it remains to be seen how announcemente regarding three 3 new All India Institutes of Ayurveda, and the development programmes for cashew would benefit Kerala.