Kerala’s PM SHRI School Upgrade Exit Could Trigger Rs 2,000 Crore Loss

Kerala finds itself locked in a politically loaded impasse over the Centre's PM Schools for Rising India (PM SHRI) scheme, unable to exit without enormous financial consequences and unwilling to fully commit without ideological ones. General Education Minister N. Samsudheen told the state Assembly on Monday that withdrawing from the scheme could cost Kerala more than Rs 2,000 crore , and that the MoU signed by the previous LDF government gives only the Centre, not the state, the right to pull out.

The scheme, launched in 2022 to transform selected government schools into model institutions equipped with modern infrastructure, smart classrooms and digital learning tools, has been a flashpoint in Kerala for years. Kerala signed the MoU with the Centre on October 16, 2025 , when the LDF was in power, without prior Cabinet approval or consultation with allies including the CPI , a decision that immediately triggered a political storm within the ruling coalition. The CPI alleged the scheme was a backdoor entry for the National Education Policy (NEP) and could facilitate the RSS agenda in schools. CPI ministers submitted a protest letter to then Chief Minister Pinarayi Vijayan , saying they felt cheated. The LDF constituted a Cabinet sub committee to review the decision, but the panel never submitted its report.

The financial trap is now clear. Besides forfeiting nearly Rs 1,000 crore earmarked for 304 selected schools across 152 blocks , the state also risks losing Rs 1,151.48 crore due under the Samagra Shiksha programme. Samsudheen was blunt about the coercive dynamic, saying the Centre had in the past withheld funds legitimately due to Kerala and there was every possibility that other grants could be affected if the state backed out. The Punjab precedent makes this concern credible. When Punjab attempted to withdraw from PM SHRI in 2023 , the Centre withheld SSA funds until the state reversed course in July 2024 .

The current UDF government , which had criticised the LDF for signing the MoU while in opposition, now finds itself in the opposite position. Chief Minister Satheesan has argued his government was effectively compelled to continue with the scheme because the previous Left government signed the agreement and accepted the funds. The Centre, in a communication dated May 8, 2026 , urged Kerala to take urgent steps for the scheme's rollout, and Samsudheen confirmed that no decision to implement or withdraw has yet been taken. A ministerial sub committee is still examining the issue.

The LDF , now in opposition, is having none of it. Former Chief Minister Pinarayi Vijayan alleged the UDF government was making moves to secretly implement the scheme, insisting that signing an MoU alone did not amount to implementation and that no monitoring committees were constituted, no school lists updated and not a single rupee was received under the scheme during the LDF's tenure. CPI MLA P. Prasad called PM SHRI a " pet project of the RSS " and said it was " highly embarrassing " that Samsudheen , an IUML leader, could not categorically rule out implementation, a remark that gained added significance given the IUML's earlier vow to throw the scheme into the Arabian Sea.