VD Satheesan, KN Balagopal clash over White Paper and missing Rs 20,000 crore

THIRUVANANTHAPURAM: Chief Minister V.D. Satheesan on Thursday alleged that Rs 20,000 crore from the Plan Fund was unaccounted for in the final budget presented by former Finance Minister K.N. Balagopal. Balagopal rejected the charge, urging Satheesan not to make unwarranted allegations for political reasons.

During separate press conferences on the White Paper presented in the Assembly by Satheesan, which outlined alleged fiscal mismanagement during the decade-long LDF administration, Satheesan and Balagopal traded charges and countercharges.

'Rs 20,000 crore missing from Plan Fund'
Satheesan claimed that the final budget presented by KN Balagopal included development projects worth Rs 35,000 crore. However, after the new government reviewed the accounts, it found a shortfall of nearly Rs 20,000 crore. According to the Chief Minister, the previous government had prepared its budget assuming it would receive Rs 14,137 crore as Revenue Deficit Grant and an additional Rs 5,000 crore from the Finance Commission. However, the 16th Finance Commission reportedly discontinued the Revenue Deficit Grant, resulting in a funding gap of nearly Rs 20,000 crore. "Who prepares a budget based on money they only expect to receive?" Satheesan asked.

'Shortfall was not in the Plan Fund'
KN Balagopal rejected the allegation, saying the difference was not in the Plan Fund but in the state's overall projected revenue. He argued that Revenue Deficit Grants have existed since the Finance Commission system was introduced and there was no way to know in advance that the grant would be discontinued. He also said the expected increase in Finance Commission allocations was based on calculations and official estimates.

"If we had shown a lower amount in the budget, Kerala would have lost the share it was entitled to receive. At the same time, we had already accounted for an additional Rs 20,000 crore in revenue expenditure. Satheesan knows this as well. These accusations are being made for political reasons," Balagopal said.

Debate over the Rs 6,000 crore treasury balance
The Chief Minister also challenged Balagopal's repeated claim that the previous government left Rs 6,000 crore in the state treasury when it left office. According to Satheesan, only around Rs 2,000 crore remained in the treasury on May 16, when the previous government stepped down. He compared the situation to a salaried employee who keeps money in his pocket while leaving all his bills unpaid.

"It's like a person earning Rs 50,000 a month, refusing to pay grocery, milk, and newspaper bills, and then boasting that he still has Rs 50,000 left. That is the condition of the treasury," Satheesan said.

'Rs 6,000 crore was available when the LDF govt left office'

Balagopal maintained that Rs 6,000 crore was indeed available when the government left office. He said some expenditures could not be approved due to the election code of conduct and required clearance from the Election Commission. Once the election results were announced, those payments were automatically released during the caretaker government's period, reducing the treasury balance by the time the new government took charge.

"The same thing happened when the government led by Oommen Chandy left office. The records will show it," Balagopal said.

Dispute over funds for local bodies
The Chief Minister further stated that the previous government had failed to release the third instalment of Rs 1,982 crore due to local self-government institutions last year. He said the new government would now have to bear that responsibility.

Balagopal said the delay occurred because approval could not be obtained from the Election Commission during the election code period. "This is a routine administrative issue and not an unusual financial lapse," he said.