In the last six years, the political dynamics between the Kerala governor and the state government have been a rollercoaster ride. The ruling CPI(M) has not minced words in labelling Khan a "saffron man" due to his stances, particularly in the higher education sector, which the party described as an attempt at "saffronisation." Amid frequent clashes with the Pinarayi government, Khan even cut short his policy address in the assembly last year.
Unlike Khan, who settled with the saffron hue after transitioning through multiple political affiliations, Rajendra Arlekar comes from a staunch saffron background. He became a member of the Rashtriya Swayamsevak Sangh (RSS) at a young age. And he had worked with the BJP for decades before becoming Himachal Pradesh governor in 2021.
Naturally, Arlekar’s appointment as Khan’s replacement sparked speculation in Kerala's political circles. Questions arose about whether Arlekar would intensify the saffron influence at Raj Bhavan and whether the confrontations between Raj Bhavan and the Vijayan government would escalate further. Several Malayalam news media even proclaimed that an "RSS governor" was coming to Kerala.
However, on Friday, Arlekar delivered his first policy address as Kerala governor, not skipping any criticism or concern of the Vijayan government against the BJP-ruled Union government in his policy address.
“My government expresses serious concern that despite taking earnest measures for revenue mobilisation and rationalising expenditure, it has been facing liquidity stress due to declining share of Union fiscal transfers,” Arlekar read in his policy address.
He also said in the policy address that despite his government’s best efforts to mobilise its own revenue, “Kerala has been facing stress on government finances because of the tapering of revenue deficit grants and cessation of GST compensation”.
It is a long-standing argument raised by both the ruling front and the opposition in Kerala that the state's financial capacity has been severely impacted by a steady decline in its share of the central divisible pool, which has dropped from 3.875% under the 10th Finance Commission to 1.925% under the 15th Finance Commission. This argument also find place in the policy address read by the new Kerala governor.
“The cessation of GST compensation and revenue deficit grants coupled with restrictive conditions on Centrally Sponsored Schemes and new borrowing constraints have posed significant fiscal challenges for my government. Yet, despite these hurdles, my government has remained steadfast in fulfilling the promises made to the people of Kerala,” Arlekar read.
The policy address also had portions of expectations of state government of Union government allowing off-budget borrowings for supporting large-scale infrastructure projects.
“Allowing Kerala to borrow Rs 6,000 crore unconditionally this financial year would bolster infrastructure development while aligning with national policy objectives. My government has submitted the above request to the Union Government and remains optimistic that it will receive favourable consideration,” reads the governor’s policy address.
The policy address also highlighted the state government’s request for special assistance of Rs 5,000 crore for the Vizhinjam International Multipurpose Seaport. It further urged the Union Government to reconsider the Viability Gap Funding repayment terms, which place an unsustainable financial burden on the state.
Many see the Kerala governor's detailed articulation of the state government’s concerns in his policy address without hesitance as a significant departure from the approach of his predecessor. However, it remains to be seen whether the new governor will adopt a confrontational stance when issues related to higher education—traditionally a contentious area—come to the forefront. This is particularly relevant as the Kerala government is now attempting to rally other states to oppose the new UGC regulations, which could grant the Chancellor—typically the state governor—greater authority in appointing Vice Chancellors (VCs) of state universities.
