Kerala Govt utilises less than 50% of budget funds as fiscal year nears end

Thiruvananthapuram: With merely 22 days remaining in the current financial year, the Kerala government has not spent even half of the allocations made for various projects announced in the previous Budget (2025-26).

Instead, the funds were diverted to meet the expenses of pre-poll announcements, including a hike in welfare pension, women's security (Sthree Suraksha) scheme, and an increased dearness allowance of government employees.

Meanwhile, the contractors' dues have been pending due to treasury restrictions on clearance. Spending on various schemes has hit a roadblock as the government utilised tax and non-tax revenues, and borrowings from the Centre to disburse salaries of government employees, pensions, and also to pay interests.

The current scenario forced the government to reset schemes, as it had done in the previous financial year. Several departments had either scrapped or reorganised schemes in the financial year 2025-26, sparking a controversy. Hence, the government reorganised schemes in the current fiscal year without a formal announcement.

Local bodies were the hardest hit by the reorganisation, as inadequate funding has been stifling various schemes. They could utilise only 41 per cent of the funds. Although the government blamed the recent civic body elections for the fund shortage, local bodies accused the government of failing to clear their bills.

According to January statistics, the state met 74 per cent of its tax revenue target and 96 per cent of its non-tax revenue target. However, it received only 28 per cent of the expected central grants. The government had to borrow ₹40,000 crore to meet various expenses due to a revenue deficit.