Thiruvananthapuram: Kerala’s political leadership has delivered a strong rebuke to the Union Budget 2026–27, accusing the Centre of ignoring the state’s development needs and raising alarms over plans for a rare earth mineral corridor that could potentially exploit Kerala’s natural resources without providing fair benefits to the state. Chief Minister Pinarayi Vijayan and other senior leaders warned that the proposed policy framework reflects a disregard for Kerala’s economic priorities and federal rights, triggering intense debate within the state.
Reacting to Finance Minister Nirmala Sitharaman’s Budget speech in Parliament, Chief Minister Vijayan claimed that the Union government had deliberately sidelined Kerala’s pressing demands. He pointed out that critical infrastructure projects, including the AIIMS medical institute, high-speed rail connectivity across seven proposed corridors, and developmental packages for the Vizhinjam port, were conspicuously absent from the Budget. Vijayan expressed concern that the Centre’s decision to maintain the Finance Commission’s devolved share at 41 percent while discontinuing revenue deficit grants could weaken Kerala’s fiscal autonomy and undermine long-term development, particularly in health, education, and employment sectors.
The rare earth mineral corridor announced in the Budget, which encompasses Kerala, Odisha, Tamil Nadu, and Andhra Pradesh, drew immediate criticism. Kerala Industries Minister P Rajeeve voiced apprehensions that the corridor could serve as a mechanism to extract Kerala’s mineral wealth for external corporate and industrial purposes, rather than promoting local beneficiation and value addition. He cautioned that without state involvement in planning and execution, the initiative could compromise environmental safeguards, bypass local industries, and fail to create meaningful employment for Kerala’s workforce.
Opposition leaders in Kerala also raised concerns about the corridor and broader Budget omissions. V D Satheesan, Leader of the Opposition in the state assembly, stressed that such major policy decisions require full consultation with the state government. He criticized the Union Budget for not addressing the financial and welfare needs of Kerala, leaving sectors such as healthcare, employment, and infrastructure development underfunded. Satheesan warned that unilateral moves to control mineral resources could trigger political and social tensions while eroding public trust in governance.
The backlash highlights long-standing tensions between Kerala and the Union government regarding resource management and environmental protection. State authorities have historically opposed mining and resource extraction projects that threaten local ecosystems or bypass state regulations. Past conflicts, such as opposition to offshore atomic mineral projects, underscore Kerala’s insistence on safeguarding environmental integrity and local livelihoods against centrally imposed schemes.
Kerala’s political leaders have vowed to continue vigorously opposing perceived neglect and unilateral initiatives in Parliament, demanding greater clarity, transparency, and protective measures in the management of mineral corridors and other central projects. They insist that future policies must balance national objectives with state rights, ensuring that Kerala’s population and industries derive tangible benefits from natural resource development while maintaining ecological sustainability.
This strong reaction from Kerala sets the stage for a fierce debate over federalism, resource control, and equitable development in India, particularly as the rare earth corridor initiative unfolds in the coming months, directly affecting multiple mineral-rich states.