Kerala CM seeks PM Modi’s intervention to safeguard State’s finances and drive development

Kerala Chief Minister Pinarayi Vijayan on Friday (October 10, 2025) sought the Centre’s intervention to ensure the State’s financial stability and realisation of its developmental and social welfare aspirations during a protracted closed-door meeting with Prime Minister Narendra Modi in New Delhi.

Speaking to reporters in Delhi, Mr. Vijayan sought to set aside perceived political differences between the ruling dispensations at the Centre and Kerala. He termed the interaction “positive, healthy, hopeful and optimistic”.

Mr. Vijayan said the State and the Centre would remain in “a constant mode of productive engagement” for national development and public welfare. “There might be ups and downs. But the relationship would stay open and robust. There is no question of one party shutting out the other. Kerala will continue to flag its needs with the Centre. The State never loses hope,” he said. 

Mr. Vijayan said he reiterated Kerala’s demand for an allocation of ₹2,221.03 crore from the NDRF as a one-time grant for the rehabilitation of the landslide-affected people in Mundakkai and Chooralmala in Wayanad. 

“I requested Mr. Modi to treat the requested assistance as a one-time endowment and not a repayable loan”, he added. 

Mr. Vijayan said he also apprised Mr. Modi of Kerala’s financial difficulties. He said the Centre’s decision to reduce the State’s borrowing limit had curtailed its considerable latitude to mobilise funds for infrastructure development.

He requested that the Centre not consider off-Budget borrowings, including by special purpose vehicles such as the KIIFB, as part of Kerala’s total outstanding public debt, thereby further hobbling the State’s ability to muster funds for critical infrastructure development, including in the health and education sectors. He requested Mr. Modi to fix Kerala’s borrowing limit at 0.5% of the total gross State domestic product (GSDP).

Mr. Vijayan also noted that the Centre had reduced various allocations for Kerala and slashed its share from the divisible pool of taxes.

He said Kerala also asked the Centre to exempt the State from bearing 25% of the land acquisition cost for national highway development.

Demand for AIIMS in Kozhikode

Mr. Vijayan repeated Kerala’s demand for the establishment of an AIIMS at land earmarked by the State government at Kinaloor in Kozhikode.

Mr. Vijayan told Mr. Modi that Kerala was on the fast track to total urbanisation. The State is required to make urban planning future-proof. Hence, it needed a National School of Planning and Architecture in the State, he said.

Mr. Vijayan reminded Mr. Modi that the Centre owed ₹221.5 crore for subsidising paddy procurement and an additional ₹254 crore in “transportation charges”. 

Mr. Vijayan said he told Mr. Modi that “relief, fiscal federalism, health, educational equality, food security and sustainable urban development dovetailed with India’s national aims”.