Kerala Chief Minister Pinarayi Vijayan urged Prime Minister Narendra Modi to step in and protect states from losses caused by the proposed GST rate changes.
He said the 50:50 GST revenue split between the Centre and states has already strained state finances. “If revenue drops further, welfare schemes for the poor will suffer. States must get compensation,” Vijayan said.
Vijayan supported tax cuts on essential goods but stressed that consumers must benefit from lower prices. At the same time, he asked the Centre to create a system that offsets the losses faced by states.
Kerala Finance Minister K. N. Balagopal warned that the state could lose ₹8,000–9,000 crore, calling it the “worst financial impact since Independence.” He said this shortfall could affect projects like the LIFE housing scheme and a free health insurance plan that supports over 42 lakh families.
Vijayan’s appeal highlights the urgent need for a GST compensation mechanism to secure state finances and protect welfare programs.