South suffers as Centre prioritises politics over equity in the Budget

Southern states and their leaders have strongly voiced concerns that the budget has overlooked their interests. While it was expected that Bihar might receive a special allocation with elections approaching, what truly shocked the South was the complete disregard for its needs—not just a smaller share of the pie, but the entire cake being handed to Bihar.

. Amid the celebratory rhetoric over exempting income up to Rs 12 lakh from taxation to benefit a large number of taxpayers, a glaring issue remains: the Union Budget’s misplaced priorities, particularly its neglect of Scheduled Caste/Scheduled Tribe communities and other marginalised sections of society.

. SCs and STs constitute 25.2% of India’s population, yet their budgetary allocations remain disproportionately low. Karnataka, Andhra Pradesh, and Telangana have enacted laws ensuring that budget allocations are proportional to SC/ST populations. A National SCSP/TSP (Scheduled Castes Sub Plan and Tribal Sub Plan) Act is urgently needed to legally mandate SC/ST budget allocations. Regardless of which party is in power or its ideological leaning, funding for SC/ST development must be proportionate to their population to bridge historical inequalities. The Parliament must rise above its political division and enact this law to ensure justice and equitable progress.

. At a time when 40% of the country’s wealth lies with 1% of people, with a historically high wealth gap and a rising unemployment rate, the central government should have increased allocations for social security and welfare schemes. However, overall budgeting for health and education has been reduced.

. While the country needs a robust railway network, the government has focused disproportionately on showpiece trains such as Vande Bharat and Namo Bharat. These trains serve already well-connected regions, ignoring the needs of underserved areas. For instance, Karnataka has one of the lowest railway densities in the country. For every 100 sq km, Karnataka has only 2.62 km of railway tracks, whereas Uttar Pradesh has 6.24 km and West Bengal has 11.79 km. While the Railway Ministry acknowledged the disparity, the NDA government failed to address the issue by allocating more funds to improve the railway network.

. As Finance Minister Nirmala Sitharaman rightly stated, agriculture is the first engine of growth. In 2016, the Prime Minister promised to double farmers’ incomes by 2022. Yet today, far from seeing their incomes double, more than half of India’s farmers are in debt. Consider Karnataka. The state produces some of the finest chillies in the country, known for their vibrant colour and rich flavour. Farmers in the Raichur district have had an excellent harvest, yet due to market failures, large quantities of red chillies are now lying unsold in cold storage. What good is a bumper yield if farmers can’t get a fair price for their produce?

.SDPI demands Rs 3000 crore in Karnataka's budget for promoting tourism along state's coastline. The government must ensure that agriculture is not just about production but also about market foresight. Just as there is crop insurance for losses due to natural calamities, there must also be safeguards against market failures.

. The Union Ministry of Agriculture must provide guidance on what crops should be grown and in what quantity, but unfortunately, this government’s vision remains fragmented. The announcement of the Mission for Cotton Productivity in this budget is a welcome step. Karnataka, being one of the largest producers of cotton, is eagerly waiting for the rollout of the scheme. However, the Centre must implement the scheme in consultation with farmers.

. As the Finance Minister rightly stated, MSMEs are the second engine of growth. But what is equally important as what was said in the budget speech is what was left unsaid. Between 2016 and 2021, 1.3 crore workers vanished from the informal sector, 24 lakh enterprises shut down, and manufacturing employment fell by 81 lakh jobs.

. This budget talks about increasing loan limits under various schemes, but the reality is that MSME entrepreneurs in backward regions are unable to access even basic loans. The average loan size under the MUDRA scheme is just Rs. 50,000. If small entrepreneurs in rural and backward regions cannot even access Rs. 10 lakh loans, how does raising the limit help?

. Banks are not lending to MSMEs in these regions but are busy writing off massive loans for big business entities. This is part of the story that was left out of the budget speech—the policies, the favours, and the massive write-offs that benefit the richest while small businesses are left to struggle and shut down.

. Tertiary healthcare infrastructure is crucial for ensuring equitable access to specialised medical services. Yet, Karnataka is the only major state that still lacks an AIIMS. As the demand for setting up AIIMS in Raichur is still pending before the Central Government.

. Despite making up only 5% of India’s population, Karnataka contributes 8.4% to the nation’s GDP. The Union Budget has doubled from Rs 24.42 lakh crore in 2018-19 to Rs 50.65 lakh crore in 2025-26, yet Karnataka’s share has stagnated. 2018-19, Karnataka received Rs 46,288 crore, but in 2024-25, it was allocated only Rs 44,485 crore, with an additional Rs 15,299 crore in grants. Given Karnataka’s significant contribution, the state should receive at least Rs 1 lakh crore annually. Meanwhile, states like Uttar Pradesh, Bihar, Madhya Pradesh, and Rajasthan are showered with funds.

. The Union Budget should reflect equitable distribution of resources. The Southern states, which contribute significantly to the nation’s economy, cannot be ignored. It is time for the government to correct its misplaced priorities and ensure that every state receives its fair share.

. (The writer is a retired IAS officer and Congress Lok Sabha member from Raichur)

South suffers as Centre prioritises politics over equity in the Budget

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