Thiruvananthapuram: Kerala Chief Minister Pinarayi Vijayan on Wednesday accused the Centre of deliberately restricting the state’s financial autonomy and weakening its development initiatives.

Speaking to the media, Vijayan said Kerala’s capital expenditure efforts had faced sustained obstruction over the past five years, with the most significant step being the retrospective reduction of the state’s borrowing limit from 2021–22 by treating loans raised by the Kerala Infrastructure Investment Fund Board (KIIFB) as part of the state’s debt.

He said the Centre’s approach was contrary to long-standing principles, noting that the Reserve Bank of India had distinguished between guarantees and loans as early as 1999. “Counting KIIFB guarantees as state debt is flawed and has resulted in a sharp cut in our borrowing capacity,” the Chief Minister said.

Vijayan added that despite repeated representations, including a detailed memorandum submitted to Union Finance Minister Nirmala Sitharaman on October 9, several of Kerala’s demands remain unresolved.

Highlighting the state’s fiscal performance under the LDF government, he said net tax revenue had increased from ₹47,000 crore in March 2021 to nearly ₹80,000 crore at present. However, he alleged that reduced borrowing limits, delayed approvals and cuts to IGST settlements had adversely affected Kerala’s finances.

The Chief Minister also referred to international trade restrictions, including US import controls, which he said had impacted Kerala’s seafood, spices, cashew and textile sectors, resulting in annual losses of around ₹2,500 crore.

He claimed that the Centre had reduced Kerala’s borrowing limit by ₹14,358 crore for 2025–26 alone and accused it of misusing Article 293(3) of the Constitution by treating funds raised by KIIFB and the Kerala State Social Security Pension Limited as state debt.

The CM said the state would continue to pursue its development agenda despite these challenges.