DMK MP Kanimozhi had an interesting comment to make after the union budget was over.
This was the first time she sat in Parliament for a Bihar state budget.
Karnataka CM Siddaramaiah said the union budget gave a ‘khaali chombu’ to Karnataka, meaning a big zero.
‘Should Karnataka just eat peanuts?’ Revenue Minister Krishna Byre Gowda asked.
Tamil Nadu CM Stalin questioned why call it a Union Budget if plans and funds are announced only for BJP-ruled election-bound states.
And a BJP minister suggested declaring Kerala as backward to get more from the budget. The latest Union Budget has reignited the debate of southern states alleging discrimination. Discrimination in fund allocation by the Modi government.
Let’s break down where Modi govt’s first budget of this term fell short, what the southern states were expecting, and why they feel sidelined.
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The Union Budget was hailed for the break in income tax. The No tax slab was raised from 7 lakh to 12 lakh.
But not everyone was happy with the 2025-26 budget.
Most of all, the southern states. Well, at least four of them have spoken up.
Let’s take a quick look at some of the reactions.
So why are they saying this?
Here’s what the southern states were hoping from the budget.
After cyclone Fengal and its aftermath, Tamil Nadu was hoping to get around ₹6,675 crore in disaster relief funds and ₹10,000 crore for Chennai Metro’s Phase 2. The wishlist didn’t stop there—funding for the Coimbatore Metro, the Tambaram-Chengalpattu railway project, and new highways were also on the table. The state has been repeatedly asking for pending funds under the Samagra Shiksha Abhiyaan scheme.
Karnataka had its own list of demands too. The state wanted grants to develop the backward regions of Kalyana Karnataka and the release of ₹5,300 crore pending under the Upper Bhadra project, which supplies water to drought-prone areas. Karnataka has also pushed for an advance-release model for centrally sponsored schemes instead of the current reimbursement system. On top of that, it requested approvals for new railway lines, ring road projects, and upgrades to National Highways.
Kerala, still recovering from the devastating Wayanad landslides, was hoping for much-needed relief funds. The state also pushed for ₹5,000 crore for the port projects and ₹24,000 crore to make up for reductions in central allocations. With rising human-animal conflicts, it had requested funds to tackle and prevent such incidents. Kerala has long been asking for an AIIMS, even identifying four possible locations. In Kinalur, the state has already secured 150 acres and is working on acquiring 100 more. But yet again, the union govt refused to approve it.
Health Minister Veena George has pointed out that despite meeting all requirements and making multiple appeals to Union Health Ministers, there’s still no progress.
Let’s look at Telangana. The much-anticipated second phase of the Hyderabad Metro Rail—spanning five new corridors—also got no response. The project needs ₹45,000 crore to be completed, but for now, it seems stuck. Telangana had sought ₹1.63 lakh crore in central assistance for key projects, including Hyderabad Metro Rail and the Musi River development project. The state also demanded the release of pending funds under the backward regions development grants. The Telangana government was counting on funding for the 350-km Regional Ring Road (RRR) and radial road projects, which would connect key areas across the north and south of the state.
Andhra Pradesh, on the other hand, focused on industrial incentives and funding for Amaravati capital city and the Polavaram irrigation project. The state also requested a BPCL refinery and additional allocations for essential infrastructure—roads, bridges, and drinking water—under the special assistance scheme on capital investment.
And what did they get? Well, not much.
Most of the states allege that their names are barely mentioned in the budget speech. None of the demands put forward by Tamil Nadu, Kerala and Karnataka was met, This includes special disaster relief funds like Wayanad and cyclone Fengal.
Meanwhile, a few proposals made by the Andhra government were approved, like funds for the Polavaram project, and funds for the holding company of Visakhapatnam Steel Plant. CM Naidu welcomed the budget, and said it is growth oriented.
But hey, let’s not forget. Naidu’s TDP is an important ally of the BJP. and Andhra is a state struggling to still build its capital and infrastructure.
Now although none of the specific requests made by the states were met, here are a few allocations that southern states did get.
Tamil Nadu Industrial connectivity project. Karnataka State Highways improvement project
Kerala Solid Waste Management Project.
While the Finance Minister announced 10,000 medical seats across the country, doctors and experts in Telangana aren’t too thrilled. Not a single one of them was for Telangana. Back in 2014, when the state was formed, there were only five government medical colleges. Over the years, that number has grown to 34—but all of them were set up by the state itself, with no help from the union government.
The budget has allocated over 3000 cr for Kerala’s rail infrastructure with a large chunk going toward upgrading 35 Amrit stations. But here’s the catch—none of the projects Kerala had been pushing for made it to the final list. Most of the funds will be used for station redevelopment, track doubling, and other infrastructure upgrades. Meanwhile, key demands like new rail lines and the Shabari project revival have been completely left out, leaving the state disappointed.
Oh! that brings me to why this is being called the ‘Bihar budget’. Bihar has been allotted at least four major projects in this year’s budget.
This includes establishing a Makhana or foxnut board, Bringing in a National Institute of Food Technology, and Facilitating Greenfield airports and many more.
Southern states in the past have gotten big allocations ahead of elections. Like in the 2023-24 budget, when Rs 5,300 crore was allocated for Karnataka for the Upper Bhadra irrigation project, but has the fund been received? It is another story.
CM Siddaramaiah has written to the PM even last month, for the release of funds.
This time around, the southern states don’t have much to cheer about this budget. And they don’t plan on just letting it go.
Tamil Nadu’s ruling party DMK is planning a protest across all districts on February 8th condemning the budget. In Kerala, CM Pinarayi Vijayan has urged all the parties, including the opposition, to unite against this. And Karnataka is planning to put together a formal protest against the budget.
Look, I am not suggesting that all other states got their wishlists. And has become a norm for the union government to be more generous toward states that have elections in the offing.
But already frustrated with their shrinking share of the national tax, the Budget only added to the southern states' concerns. Feeling sidelined, the southern chief ministers didn’t hold back in expressing their disappointment. And this is not just about economics and politics but worsening of state-union govt relations and a large section of the country’s population feeling ignored.
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Produced by Megha Mukundan, edited by Nikhil Sekhar
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