Kerala FM Urges GST Compensation, Grants for States Amid Fuel Price Hike

Kerala Finance Minister K. N. Balagopal has urged the central government to provide GST compensation and additional financial grants to states, citing the increasing burden of fuel prices and economic challenges. Speaking in Thiruvananthapuram, Balagopal explained the need for immediate fiscal support to ensure financial stability at the state level.

Addressing the press, the minister warned that India's current economic policies could lead to a crisis similar to that of Sri Lanka, which has been facing severe financial distress. He pointed out that the central government should re-evaluate its economic approach to prevent states from falling into fiscal hardship.

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“The financial crisis in Sri Lanka is the result of international policies. The Indian government is following a similar path and should correct its policies before it’s too late. States are struggling due to rising fuel prices, and they must be given GST compensation and additional grants to sustain their economies,” Balagopal stated.

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According to Business Standard Reports, the minister’s remarks come amid nationwide concerns over inflation and increasing fuel prices, which have placed additional pressure on state finances. Many state governments have been demanding an extension of the GST compensation scheme, which ended in June 2022, arguing that revenue shortfalls continue to impact their ability to fund development projects and welfare programs.

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Balagopal’s call for additional financial aid reflects the growing tension between the states and the central government over revenue-sharing and economic policies. With fuel prices rising and global economic uncertainties looming, the demand for fiscal support and policy corrections is gaining traction among state governments.

The issue is expected to spark further debates over federal financial relations and economic policy adjustments in the coming days.

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