Explained : Kerala Leaders Slam Union Budget 2026 for Ignoring State Needs | Politics News and Its Impact

Last Updated:February 02, 2026, 11:30 IST

CM Pinarayi Vijayan said the state’s long-standing demands for AIIMS, high-speed corridors for railway development and a special package for Vizhinjam port development were ignored

Kerala Chief Minister Pinarayi Vijayan. (PTI file photo)

With Kerala going into elections, expectations were high in the state ahead of the Union budget 2026. When finance minister Nirmala Sitharaman rose for the budget speech, she mentioned Kerala twice—once stating that there will be a rare earth corridor in Odisha, Kerala, Andhra Pradesh and Tamil Nadu to promote mining, processing, research and manufacturing as well as proposing turtle trails along key nesting sites in the coastal areas of Odisha, Karnataka and Kerala.

However, this did not sit well with Kerala, with chief minister Pinarayi Vijayan saying the Union Budget reveals the Centre’s continued severe discrimination and neglect towards the state.

Vijayan said Sitharaman had deliberately forgotten the fact that Kerala is also on the map of India. “The state’s long-standing demands for AIIMS, high-speed corridors for railway development, and a special package for Vizhinjam port development have all been completely ignored,” he said.

While the rare earth corridor was also mentioned in the state budget and was one of the demands kept before the Centre, the nature of the corridor seems to be different.

“The Centre’s move to seize Kerala’s mineral wealth is extremely dangerous. But the announcement in the central budget is a policy that paves the way for private monopolies to mine. The central government’s move is to help the private sector by speeding up the issuance of environmental clearances by cancelling even the strict conditions of the Ministry of Environment. The state government had announced in the budget that a mineral corridor would be established in the public sector by connecting Vizhinjam, Chavara and Kochi. The central government’s move to hand over mineral resources to private companies, contrary to the state’s announcements, is dangerous.”

Contesting the chief minister’s stand, BJP state president Rajeev Chandrasekhar said when the finance minister talks about opportunities for the youth, she is not talking about opportunities for only one particular state.

Noting that Sitharaman had spoken about tourism, manufacturing, and semiconductors, he said: “I don’t see why the Kerala government does not see this as opportunities for the youth of Kerala. If the state government was smart, if they had the capability and motivation, they would be seizing these opportunities like the governments of Assam, Tamil Nadu or Maharashtra.”

He added that the only way for Kerala to get out of the broken economy is to have a BJP government in the state.

Industry experts in Kerala say that while the budget is futuristic, no special projects have been announced for the state or capital city Thiruvananthapuram.

Reghuchandran Nair, president of Trivandrum Chamber of Commerce and Industry, said of the projects announced—like five regional medical hubs or three AIIMS for Ayurveda—Kerala should try to get one of each in the state.

“I think we all got carried away when Prime Minister Narendra Modi came and said he will make Trivandrum the best city in the country. We thought that probably from Metro to AIIMS to high court bench, everything will be here. But the budget did not consider this. So it is quite disappointing.”

He added that they are also disappointed because there is no mention of affordable housing. “The definition given for affordable housing is old, dating back to 2017, and it has not been revisited. We think this not being mentioned in the budget. It will drop from18 per cent to 12 per cent, which means the rental market is going to shoot up, which will ultimately affect the middle class and lower-middle class.”

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