Union Finance Minister Nirmala Sitharaman met Kerala Chief Minister Pinarayi Vijayan today at Kerala House in Delhi. This marks her first visit to Kerala House. Though the meeting was termed "unofficial", sources indicate that Vijayan raised several official matters with the finance minister.
Last month, the Union government informed the Supreme Court that Kerala is among the most financially unhealthy states in the country, further accusing it of negatively impacting India’s credit rating due to its rising debt. While Kerala’s Finance Minister K.N. Balagopal claimed in his last budget that the state had managed to survive the financial crisis, concerns over its financial stability persist. With the financial year ending this month, the state treasury is under strain, and Kerala is seeking Centre’s approval to borrow an additional ₹12,000 crore.
Had a warm interaction with Union Minister of Finance and Corporate Affairs @nsitharaman, in the presence of @KeralaGovernor, at Kerala House in New Delhi. Kerala’s Special Representative in Delhi, Prof. KV Thomas, also attended the meeting. pic.twitter.com/PiWanEmkec
— Pinarayi Vijayan (@pinarayivijayan) March 12, 2025
It is learnt that the state’s overall financial situation was a key topic of discussion during the meeting. Additionally, Kerala is facing a cash crunch in implementing the Mundakkai-Chooralmala rehabilitation programme for landslide victims.
The Vizhinjam International Seaport project was also brought up in the discussion. Kerala has urged the Centre to reconsider its decision requiring the state to repay ₹817.80 crore—sanctioned as a viability gap fund (VGF) for the project—in net present value (NPV) terms. The state argues that since it is making a significant investment of ₹5,554 crore in the project, and as the port’s returns would benefit the nation as a whole, the repayment requirement should be waived.
Sources suggest that while Sitharaman acknowledged the concerns, she did not make any firm commitments on the matter. Notably, Kerala’s new Governor, Rajendra Arlekar, who recently assured that he would support the chief minister in effectively presenting the state's demands before the Centre, was also present at the meeting. The Governor gave this assurance during a meeting at Kerala House in Delhi with Vijayan and MPs from the state on March 11.
