Amid opposition UDF sloganeering against him, Kerala Governor Arif Mohammed Khan on Friday delivered the customary address to the Assembly with the policy document outlining the Left government's administrative achievements and criticising the Centre for allegedly pushing the state to financial constraints by reducing its resource allocations.

Khan, who delivered the policy address marking the budget session of the Assembly, underlined the significance of "cooperative federalism" and said that in recent times, legislations by the Union government are taking place on subjects enumerated in the State and Concurrent Lists without effective consultation with the states.

"This goes against the grain of cooperative federalism. My government is of the opinion that this should not be a practice to be continued," he said.

There was speculation that Khan, who has been at loggerheads with the Pinarayi Vijayan administration on various matters, might skip portions of the policy document of the state government criticising the BJP-led NDA government at the Centre.

However, the Governor did not skip any such portion in his address, which was boycotted by the Congress-led UDF opposition alleging "unholy nexus" between him and the CPI(M)-led state government.

The budget session began on a stormy note with the opposition UDF raising "go back" slogans against the Governor Arif Mohammed Khan and staging a protest sit-in at the portal of the House after boycotting the proceedings.

As soon as the Governor entered the Assembly hall to deliver his customary policy address, the opposition members started sloganeering and showed a banner and a series of placards, which could be read like 'Government-Governor unholy nexus' and that he signed the Lok Ayukta ordinance to protect Chief Minister Pinarayi Vijayan.

The Ordinance, brought in by the Left government, had kicked up a political storm in the state recently as opposition parties raised an objection against it, saying it would weaken the anti-corruption watchdog.

Kerala witnessed high drama on Thursday, the eve of the budget session, as Khan initially refused to sign the policy document of the LDF government as a mark of displeasure over a letter written by it against the appointment of a senior journalist-turned politician in a key post in the Raj Bhavan.

Noting that the federal polity requires the Union and State governments to work together harmoniously to do justice to the people, Khan, in his address, said in these difficult times, all are committed to imbibe the principles of cooperative federalism and find areas of synergy and resolution.

Detailing the financial constraints faced by the state, he said besides the revenue loss due to COVID, Kerala has been facing severe cut in revenue from central transfers at present.

There has been a consistent decline in the State share provided from the divisible pool by successive Central Finance Commissions, he said.

"At the time of the 10th Finance Commission, the State share was 3.8 per cent of the divisible pool. By the 14th Finance Commission, this had come down to 2.5 per cent and now the 15th Finance Commission award only permits 1.92 per cent," he said.

The Revenue Deficit Grant is going to be reduced sharply in the coming Financial Year, he pointed out.



It has been the practice of the Union government to give exemption to the direct taxes which fall in the divisible pool and to raise significant amount of revenue through cess and surcharges, which are not in divisible pool, he said.

"This causes a huge fall in the share of resources due to the State. Hence, it is not just the reduction in state's own revenue which causes the deficit but mainly the change in policy at the level of Union Government in devolving resources to the states that pushes the state government to financial difficulties," he said. Importantly, while the fiscal deficit of the Union government is around 6 per cent, the states' deficits are restricted to 3 per cent.

This is "unscientific" as the expenditure obligations of the State are much higher than the Union and the spending has increased manifold due to the COVID related packages and assistance from the part of the State government, he said.

Stating that the Union Budget has not accommodated any long-standing demands of Kerala, he said the state government expects an early approval from the Centre for its ambitious K-Rail rail corridor project, which found no mention in Nirmala Sitharaman's recent budget.

Claiming that the climate of "economic distress" that currently prevails in the country was exposed by the recent farmers' agitation against the farm legislation, he said the stir was a reflection of acute deprivation among workers and farmers in rural and urban setting alike, which necessitates immediate drastic intervention. Outlining the achievements of the LDF government, he said the state has been in the forefront of areas like sustainable development, health, general education and so on.

The state government is effectively carrying out the vaccination drive to build herd immunity against Covid-19 in the society, he said. Enabling the citizens of the State to avail quality infrastructure for basic services of water, electricity, telecommunications and transport continues to be an area in which the state government is focusing its attention and identifying innovative projects, he said.

On the multi-crore K-Rail project, against which the opposition is leading a state-wide project, he said it would provide a new environment-friendly transport mode compared to fossil fuel-based transportation and would be a green initiative that would catalyse employment and growth while enhancing the speed, joy and comfort of travel. Referring to the Mullaperiyar Dam issue, Khan said as Kerala is committed to providing water to Tamil Nadu while safeguarding the lives of its people, it has put forth the proposal to build a new dam in the place of the existing dam which is around a century and a quarter old.

The Governor also mentioned that the LDF government intends to revise the Housing Policy 2011 and would go ahead with the proposal of preparing a new curriculum based on the National Education Policy (NEP), 2020. It was significant to note that ruling members remained silent throughout his address as the usual thunderous clapping at the desks while mentioning the achievements of the government was missing this time.

It was generally viewed as a silent protest against Khan for creating high drama on the eve of the budget session by refusing to sign the policy document. The issue was resolved after the government, yielding to the Governor's pressure, replaced K R Jyothilal as principal secretary, General Administration Department (GAD) with a senior civil servant.

It was Jyothilal who had written the letter on behalf of the government to the Raj Bhavan a few days ago citing the violation of prevailing conventions in the appointment of former BJP leader Hari S Kartha as Additional Personal Assistant to the Governor.