Kerala Assembly: Opposition LDF quits over budget cuts in allocations to local bodies

The opposition walked out after the speaker rejected its announcement of a motion to postpone a plan to cut funding for local bodies in the revised budget tabled by the UDF government.

The opposition Left Democratic Front (LDF) walked out of the Kerala Legislative Assembly on Wednesday (July 1, 2026) after Speaker Thiruvanchoor Radhakrishnan rejected its notice of a motion to postpone a plan to cut funds for local bodies in the revised budget for 2026-27 presented by the UDF Congress led by the United Democratic Democrats

Communist Party of India (CPI) MLA GR Anil sought the House’s permission to adjourn the debate on the issue, saying that the local bodies were facing a serious crisis, unable to spend on their day-to-day affairs or on development and social projects earlier planned for the year as no spillover funds were allocated for the previous year.

Chief Minister VD Satheesan said since the issue was raised during the budget discussions, there was no urgency to discuss it under the adjournment motion. He said the previous LDF government had allocated ₹11,189 crore for local bodies in its last budget, while the UDF government had allocated ₹8,655.45 crore in the revised budget, a reduction of ₹1,533.55 crore. The allocation had to be reduced as there was a deficit of ₹20,500 crore in the amount planned as central transfers in the LDF budget. A proportional reduction has been made in the plan for all departments. However, additional allocations were made to the Scheduled Castes and Scheduled Tribes Departments as well as the Fisheries Department.

He alleged that the previous LDF government had failed to transfer the third installment of allocations for local bodies in the 2025-26 budget. The current situation arose as a result of “failures” in the preparation and allocation of the LDF budget. The LDF has also not allocated the spillover in its budget, he said.

Pinarayi accuses the CM of “deceiving” the House

Leader of Opposition Pinarayi Vijayan accused the chief minister of misleading the House as separate allocations are usually not made in the budget for spillover projects but as additional allocations later.

“Everybody here is aware of this fact. Such misleading comments have become almost a habit for Mr. Chief Minister. Similar is the case with his claim that the LDF government did not provide the third installment of the local body plan allocations. The third installment was delayed because the Model Code of Conduct for the 2026 assembly elections came into effect. The government wrote to the Election Commission for permission to transfer the money, but the money was easily allocated from the elections. ₹6,000 crore which was left in the exchequer when this government came to power,” he said.

Mr. Vijayan said there was an “impression” that the LDF government had allocated less funds to local bodies, which was contrary to reality. The UDF government earmarked a total allocation of ₹83,020 crore for local bodies during 2011-16, of which only ₹78,275 crore was spent. The LDF government initially allocated ₹1.37 million and spent ₹1.41 million during 2016–21. In the LDF tenure of 2021–2026, the allocation was ₹1.51 million, while the expenditure was ₹2.4 million.

“This stark difference with increased spending was possible because we never reduced spillovers as is happening now. Chief Minister cited lack of devolution of revenue deficit grant as one of the reasons for such cuts. The LDF government also did not receive this grant from 2024, but this reason was not used to reduce allocations to local bodies, which seem to have left the UDF earlier. The UDF had left the path earlier. Also, Gandhi’s journey gram swaraj will be affected by these cuts, from palliative care activities to the functioning of the Buds school and projects for the elderly,” he said.

Published – July 1, 2026 12:11 PM IST