Kerala chief minister Pinarayi Vijayan has called for Prime Minister Narendra Modi’s immediate intervention to safeguard states from potential losses arising out of the proposed Goods and Services Tax (GST) rate revision.
“The Union government needs to address the concerns of states facing revenue loss while revising GST rates,” Vijayan told reporters, adding that he had already written to Modi outlining Kerala’s position.
He warned that the current 50:50 GST revenue split between the Centre and states has left state finances under pressure.
Vijayan cautioned that sudden shortfalls would weaken welfare initiatives, stressing, “The loss of revenue to states will hamper welfare initiatives for the poor and vulnerable. Therefore, states must be compensated”.
While supporting tax cuts on essential goods, Vijayan urged the Centre to ensure consumers benefit from lower prices and pressed for a compensation mechanism to offset state losses.
The appeal followed state finance minister K. N. Balagopal’s assessment that Kerala could suffer an additional shortfall of ₹8,000–9,000 crore.
The finance minister described the reforms as, “the worst impact on public finances since Independence”.
He noted such a dip could affect key schemes, including the LIFE housing project and a free insurance programme assisting over 42 lakh families.