Archive · 29 Jul 2026
Kerala CM Claims Finance Commission Misclassified Census Towns
The Chief Minister of Kerala, V D Satheesan, said that the 16th Finance Commission made a mistake by calling many 'census towns' as urban areas.
This mistake has reduced the money given to rural areas to just Rs 300 crore.
The Chief Minister also said that this has caused problems for local governments in getting money for their plans.
He mentioned that the state government is trying to convince the central government that the mistake was made.
He also said that the first part of the planned money will soon be given to local governments and that there has been no big reduction in planned spending.
The previous government had planned to spend Rs 35,000 crore, but there was a shortfall of Rs 20,000 crore from the central government, so the current government had to reduce the planned expenditure by Rs 5,000 crore.
They kept the money for SC/ST and fishing communities the same.
Kerala CM V D Satheesan claims the 16th Finance Commission incorrectly assessed many census towns as urban areas.
This misclassification has reduced funds for rural areas to Rs 300 crore.
The issue has also affected the distribution of funds to local bodies.
The Kerala government is trying to convince the central government that the assessment was incorrect.
The planned expenditure was reduced by Rs 5,000 crore due to a Rs 20,000 crore shortfall in central funds.
- Who
- Kerala Chief Minister V D Satheesan and the 16th Finance Commission
- What
- Misclassification of census towns as urban areas, leading to reduced funds for rural areas
- When
- The issue was raised on Wednesday during a press conference
- Where
- Thiruvananthapuram, Kerala
- Why
- The misclassification has reduced funds for rural areas and affected the distribution of funds to local bodies
Kerala Government
16th Finance Commission
Classification of Census Towns
Kerala Government
The Kerala government argues that many census towns should be classified as rural areas, as they are not officially governed as municipalities or municipal corporations.
16th Finance Commission
The 16th Finance Commission has classified these census towns as urban areas, leading to a reduction in funds allocated to rural areas.
Fund Allocation
Kerala Government
The Kerala government claims that the misclassification has reduced funds for rural areas to Rs 300 crore and has affected the distribution of funds to local bodies.
16th Finance Commission
The 16th Finance Commission's classification has led to a different allocation of funds, which the Kerala government finds problematic.
- Census Town
- A place treated as urban for census purposes but not officially governed as a municipality or municipal corporation.
- Fund Reduction
- Rs 300 crore
- Planned Expenditure Reduction
- Rs 5,000 crore
- Central Funds Shortfall
- Rs 20,000 crore
- Previous Planned Expenditure
- Rs 35,000 crore