Keralam Chief Minister V.D. Satheesan defends State government’s borrowings

In a press conference held in Thiruvananthapuram on September 2, 2026, Keralam Chief Minister V.D. Satheesan defended the State government's recent borrowing. The Chief Minister explained that every government globally resorts to borrowing. He addressed the additional challenge faced by the United Democratic Front (UDF) government, which is not receiving the Revenue Deficit Grant, a provision that was available until the previous year.

This grant, allocated by the 15th Finance Commission for ₹55,000 crore, was discontinued by the 16th Commission. The previous Chief Minister had factored in this grant for the Budget, and the tax devolution from the Union government, which was expected to increase, has not materialized. Consequently, the borrowing limit, initially set at 3.5% of the Gross State Domestic Product (GSDP), has been reduced to 3%.

Satheesan noted that while the government cannot exceed borrowing limits, the previous Left Democratic Front (LDF) government had relied on off-Budget borrowings through the Kerala Infrastructure Investment Fund Board (KIIFB), resulting in an additional debt of ₹38,000 crore. The Chief Minister acknowledged the increase in taxes but expressed dissatisfaction with this measure.

He emphasized the government's goal of enabling the Kerala State Road Transport Corporation (KSRTC) to operate independently without relying on government grants. Additionally, Satheesan praised the Civil Supplies Corporation for ensuring the supply of essential items throughout the State during Onam. He dismissed Opposition allegations of attempting to undermine the MDMA case involving the Chief Minister's social media coordinator, stating that the current government is taking action against individuals irrespective of their political affiliations. Home Minister Ramesh Chennithala, leading Operation Toofan, was lauded for his effective efforts.